Oil fell nearly 1 per cent towards $70 today, giving up some of the previous day's gains of 3 per cent, as a higher-than-expected rise in oil product stocks outweighed news signalling a US economic recovery.
Strong growth in US retail sales, New York State manufacturing activity and US producers' prices failed to offset energy demand concerns in the world's top consumer after data showed a sharp jump in U.S. distillate stocks.
NYMEX crude for October delivery was down 69 cents at $70.25 a barrel after settling up $2.07 yesterday, while ICE Brent was down 70 cents at $69.16.
Though oil has more than doubled from this year's low of $32.70 hit on January 20th, it is trading 52 per cent below the record high of more than $147 struck in July 2008. The market this year hit a high of $75 on August 25th.
The American Petroleum Institute said in its weekly inventory report after yesterday's close that crude stocks rose by 631,000 barrels last week, against the forecast in a Reuters poll of analysts for a 2.4-million-barrel drawdown.
The industry group also said distillate stocks, which include heating oil and diesel fuel, jumped by 5.2 million barrels, against a forecast rise of 1.3 million. The US Energy Information Administration (EIA) will release its own data later today.
The US currency hit a one-year low against a basket of major currencies as a sell-off gathered steam, with investors moving to riskier assets, pushing up stocks. Japan's Nikkei average rose 0.8 per cent today.
In the United States, retail sales rose at the fastest pace in 3.5 years in August and New York State manufacturing activity hit a near two-year high, data showed, more signs that economic activity was improving.
A separate report showed prices received by US producers rose faster than expected last month, also giving a lift to US stock markets.
The Organization of the Petroleum Exporting Countries said signs of a rebound in the world economy appeared to be gathering but that the recovery would be gradual.
Reuters