SINGAPORE, AP – Oil prices fell Wednesday as traders awaited a midweek U.S. government petroleum inventories report expected to show domestic gasoline stocks rose for the second straight week.
Prices continued to be supported by persistent concerns about the outlook for Iran’s oil exports amid the country’s confrontation with the West over its nuclear program.
Also, traders remain worried about unrest in Nigeria, violence in Iraq and rising resource nationalism in South America.
Light, sweet crude for June delivery dropped 5 cents to $70.64 a barrel in Asian electronic trading on the New York Mercantile Exchange. The contract rose 92 cents to settle at $70.69 a barrel Tuesday.
June Brent at London’s ICE Futures exchange fell 8 cents to trade at $71 a barrel.
Gasoline futures fell marginally to $2.0460 a gallon while heating oil prices fell 0.32 cent to $1.9919 a gallon. Natural gas futures dipped 1.1 cents to $6.570 per 1,000 cubic feet.
Light, sweet crude for June delivery dropped 14 cents to $70.55 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 92 cents to settle at $70.69 a barrel Tuesday.
Gasoline futures lost 0.11 cent to $2.0455 a gallon, while heating oil prices fell 0.51 cent to $1.99 a gallon. Natural gas futures dipped 3.6 cents to $6.545 per 1,000 cubic feet.
U.S. gasoline stocks are seen growing for a second straight week in government data due later Wednesday, according to a Dow Jones Newswires survey of nine analysts. Gasoline stocks were expected to grow by an average of 1.3 million barrels, the survey showed.
Last week, the Energy Information Administration, the U.S. Energy Department’s statistical arm, reported that domestic gasoline demand remained flat at around 9 million barrels a day in the week ended April 28, allowing stocks to post a surprise build of 2.1 million barrels for the week.
Analysts have attributed the sluggish consumption to rising prices, while production is seen picking up again as refiners end seasonal maintenance.
Distillate stocks, which include heating oil and diesel fuel, are estimated to build by an average of 300,000 barrels, while expectations for crude stocks were mixed.
The U.S. Energy Department said Tuesday that U.S. oil demand in the second quarter will likely grow by just 1 percent, or 200,000 barrels a day, to 20.63 million barrels a day, partly due to high gasoline prices.
With little evidence of a significant increase in global supplies, “crude oil prices will remain high through 2007,” the department’s statistical agency said.
The agency also forecast an average U.S. retail gasoline price of $2.71 a gallon, an increase of 9 cents a gallon from its April forecast. Last summer, pump prices averaged $2.37 a gallon.
In Nigeria, some 500,000 barrels per day of crude oil production, most of it operated by Royal Dutch Shell PLC, remain off-line because of violence there, and more than 300,000 barrels per day remain shut down in the Gulf of Mexico since Hurricane Katrina battered offshore platforms in August.