U.S. crude futures settled slightly lower Tuesday, consolidating after gains in the previous session as traders await weekly government data on domestic oil stockpiles.
Light, sweet crude for July delivery settled 14 cents, or 0.2%, lower at $93.31 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled $1.18 higher at $103.24 a barrel.
Oil prices wavered between gains and losses for most of Tuesday's session, as investors looked ahead to data later this week on both the oil market and the broader economy for clues about fuel demand.
"The energy markets have been down, up, and down again," said Gene McGillian, a broker and analyst at Tradition Energy. Any push in prices above $93 a barrel has been difficult to sustain in recent days, he said, and many investors remain cautious ahead of monthly data on U.S. payrolls due Friday, and this week's oil-inventory report.
A report by the U.S. Energy Information Administration Wednesday is expected to show domestic oil inventories fell by 400,000 barrels last week, according to a Dow Jones Newswires survey of analysts. A modest decline of that size would keep inventories close to the 82-year high of 397.6 million barrels notched in the previous week.
Gasoline stockpiles are seen increasing by 500,000 barrels, while stocks of distillate, which include heating oil and diesel, are seen increasing by 1 million barrels.
Refiners are expected to increase operations by 0.5 percentage point.
The American Petroleum Institute, an industry group, said in its own survey late Tuesday that U.S. stockpiles tumbled 7.8 million barrels last week. Gasoline stockpiles fell by 1.3 million barrels, while stocks of distillate rose by 0.2 million barrels.
Refinery runs increased to 87.6% from 86.6%, API said.
U.S. oil prices fell Tuesday after a 1.6% rally in the previous session. On Monday, a weak reading on the U.S. manufacturing sector prompted bets that the Federal Reserve would delay a slowdown in the bond-buying program that has lifted equities, energy and some commodity markets.
The outlook for the broader economy has played an increasingly important role in oil prices in recent weeks.
Oil supplies are healthy, with U.S. stockpiles last week rising to the highest level in over 80 years. On Friday, the Organization of the Petroleum Exporting Countries agreed to keep output steady.
High supplies have shifted investor focus to whether the global economy will grow fast enough to raise oil and fuel demand. So far, many traders are skeptical that fuel use is set to rebound, which is keeping oil prices in a tight range between $90 and $95 a barrel.
In the second quarter of this year, "events are developing in such a way to suggest that, without a major supply shock, a rebound this time cannot be taken for granted," said analysts at energy brokerage PVM Oil Associates in a research note. "The oil market has lost its six-pack and gone all flabby."
Front-month July reformulated gasoline blendstock, or RBOB, settled 3.31 cents, or 1.2%, higher at $2.8182 a gallon. July heating oil settled 3.15 cents higher at $2.8649 a gallon.
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