Oil slid back below $69 a barrel on Wednesday, reversing a 2.6 percent gain the day before, after data showed a surge in US gasoline stocks, signalling weaker-than-expected demand from the world's top energy user. The market awaits confirmation of the American Petroleum Institute's (API) bearish figures with the release of the US Energy Information Administration's (EIA) own data later.
US economic figures due later will shed more light on the health of the US economy. May durable goods orders and new home sales figures could show the recession might be near a bottom, but a firm rebound is likely to be slow to emerge. By 0700 GMT, US crude for August delivery was down 38 cents at $68.86, off a morning low of $68.06, after settling at $69.24 on Tuesday. London Brent crude fell 43 cents to $68.37, off an early low of $67.58. Pervan expects crude to trade between $62 and $69 a barrel over the next week.
WEAK DOLLAR SUPPORTS Oil prices have more than doubled since last winter's low $30s as investors have started to price in expectations for an economic recovery which should boost consumption. API data on Tuesday showed US crude stocks fell 72,000 barrels last week, far less than expectations of a 1-million-barrel decline in a Reuters poll. The Commerce Department will release US May durable goods orders at 1230 GMT. Economists polled by Reuters expect a fall in orders of 0.6 percent versus a rise of 1.7 percent in April.