US oil prices slipped on Tuesday in choppy trading as an anticipated fuel stocks rise and weak demand data countered a lift from the dollar's slump after a consumer confidence drop fed expectations the Federal Reserve will print money to buy assets.
US oil prices were hemmed inside Monday's trading range ahead of weekly inventory reports, with persistent high oil stockpiles and analyst expectations that refined fuel stocks rose again last week weighing on prices. MasterCard reported that US weekly retail gasoline demand fell versus the previous week and was lower against the year-ago period, also helping to pull oil back.
Oil had staged an intraday rally on lift from the broadly weaker dollar, which fell when a report from the Conference Board showed US consumer confidence fell in September to its lowest level since February. US crude for November delivery fell 34 cents, or 0.44 percent, to settle at $76.18 per barrel, having traded from $75.53 to $77.12 and remaining inside Monday's trading range of $75.52 to $77.17.
ICE Brent November crude managed to finish up 14 cents, or 0.18 percent, at $78.71 a barrel. With US crude oil and refined fuel stocks above year-ago levels, fuel stocks were expected to have risen slightly last week, while crude stocks were forecast to be only slightly lower.
Total distillate stocks were expected to have risen 400,000 barrels in the week to September 24, with gasoline stocks up 500,000 barrels, a Reuters analyst survey on Tuesday showed. Crude oil stockpiles were forecast to have fallen only 300,000 barrels on lower imports as seasonal refinery maintenance slowed demand.
"While we look for the (inventory) numbers to prompt a price sell-off, sustaining any price weakness could prove problematic if the equities remain strong and the dollar remains weak," Jim Ritterbusch, president at Ritterbusch & Assoc. in Galena, Illinois, said in a note.
Bulging crude stocks at the key Cushing, Oklahoma, hub, delivery point for US West Texas Intermediate benchmark crude, have helped put European benchmark Brent at an atypical premium to US crude futures, still well above $2 a barrel. The high inventories at Cushing have also helped keep front-month US crude futures priced more than a dollar less than the next futures contract further out.
Industry inventory statistics from the American Petroleum Institute are due on Tuesday at 4:30 pm EDT (2030 GMT), followed by government data from the US Energy Information Administration on Wednesday. "We are still convinced that with ample supply and high inventories, there is more risk that prices will go down rather than come back up," said Barbara Lambrecht, analyst at Commerzbank.
Oil investors kept watching any possible weather threat to supplies as Tropical Depression 16 neared tropical storm strength in the Caribbean Sea. But it was expected to drift north-east and away from the Gulf of Mexico oil infrastructure.