By Mark Tay | SINGAPORE
Crude oil futures dipped on Wednesday as the U.S. dollar held around three-week highs and industry stocks data indicated a build in U.S. crude inventories.
International Brent crude oil futures LCOc1 were trading at $48.32 per barrel at 0608 GMT (0208 ET), down 5 cents from their previous close.
U.S. West Texas Intermediate (WTI) crude futures were down 7 cents at $46.28 a barrel.
The U.S. dollar index, which measures the currency against a basket of six majors, rose as high as 96.143 .DXY, its highest level since Aug. 9, on Tuesday.
A stronger greenback makes dollar-priced commodities like oil more expensive for holders of other currencies and possibly capping demand.
The dollar strengthened after recent hawkish comments by Fed Chair Janet Yellen and Vice Chair Stanley Fischer boosted expectations that a rate hike by the U.S. central bank at its September policy meeting could be on the horizon.
“The pullback in commodity prices is likely to continue in the short term with a stronger USD and weaker fundamentals,” Australian bank ANZ said in a note.
U.S. crude stocks rose by 942,000 barrels in the week to Aug. 26 to 525.2 million, nearly in line with analysts’ expectations for an increase of 921,000 barrels, data from industry group the American Petroleum Institute showed on Tuesday.
Official U.S. oil inventories data published by the EIA is due for release on Wednesday.
Concerns over refinery production outages caused by storm threats in the Gulf of Mexico have done little to support prices as a product glut in the United States persists.
“Prices didn’t receive any support from news that nearly a quarter of the capacity in the Gulf of Mexico has been shut due to storms,” ANZ bank said.
Despite the lower prices, many analysts see a tighter supply and demand balance towards the end of the year and are raising their price forecasts accordingly.
“We mark to market our Q3 Brent forecast $2 higher and raise Q4 accordingly from $50 to $52 (per barrel). The balances are slightly tighter in Q4 than previously assessed,” Barclays bank said on Wednesday.
(Reporting by Mark Tay and Henning Gloystein; Editing by Richard Pullin and Vyas Mohan)