Oil futures pulled back Wednesday after the International Energy Agency
suggested another release of emergency oil stockpiles could be on the horizon.
Light, sweet crude for August delivery fell 58 cents, or 0.6%, to $96.85 a
barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe
exchange declined 60 cents, or 0.5%, to $117.15 a barrel.
Traders sold off some of Tuesday's gains after a top IEA official said the
agency will assess next week whether it needs to release more oil from
emergency reserves, following the announcement last month that its members
would inject 60 million barrels of oil and products into the market.
"We will assess the situation very carefully in the early part of next
week," said David Fyfe, head of the IEA's Oil Industry and Markets
division.
Until Wednesday, officials at the IEA, which represents the world's major
energy consumers, had downplayed talk of another release. But Fyfe's comments
suggest the group is taking the possibility more seriously.
The IEA's late-June decision to tap crude reserves helped bring down crude
prices in the subsequent days, but futures have since returned to
pre-announcement levels. The
U.S.
government said this week that it found buyers for all of its portion of the
sale--about 30 million barrels--suggesting brisk demand.
"I wouldn't be surprised at all if they did (another release), just given
the level of prices now and the general rhetoric coming out" of the IEA,
said Matt Smith, oil analyst at Summit Energy in Louisville, Ky.
Oil futures also traded lower on a report late Tuesday from the American
Petroleum Institute that showed an jump in U.S. oil stockpiles last week. The
build came as a surprise to market participants, who look to changes in stock
levels for cues on demand levels.
The API said crude stocks rose 2.3 million barrels last week. Gasoline stocks
fell 1.6 million barrels, while distillate inventories, including heating oil
and diesel, rose 4.8 million barrels, the API said.
Traders will turn their attention to a more closely watched inventory survey
from the U.S. Department of Energy, due Wednesday at
10:30 a.m. EDT
, for confirmation of the API's figures.
Analysts surveyed by Dow Jones Newswires expect oil stocks last week fell 1.3
million barrels, on average. They forecast a 100,000-barrel increase in
gasoline supplies, while they expect distillate stocks rose 200,000 barrels.
Traders will also be eyeing testimony by Federal Reserve Chairman Ben Bernanke.
Tuesday's late-day price rally followed the release of minutes from a meeting
of the Fed's policy-making body. Those minutes suggested that another round of
monetary stimulus could be in the offing.
Front-month August reformulated gasoline blendstock, or RBOB, recently traded
up 0.23 cent, or 0.1%, to $3.1005 a gallon. August heating oil fell 1.65 cents, or 0.5%, to
$3.0711 a gallon