TOKYO: Brent crude prices inched lower on Tuesday after hitting a seven-month high a day earlier, but market momentum appeared strong on a weak dollar, French refinery restarts, Nigerian oil infrastructure attacks and falling U.S. crude inventories.
Brent crude for August delivery LCOc1 was down 14 cents at $50.41 a barrel by 0333 GMT (11:33 p.m. EDT), after settling up 91 cents on Monday. It rose as high as $50.49, just shy of $50.83 in the previous session, the strongest since Nov. 4.
NYMEX crude for July delivery CLc1 was down 11 cents at $49.58 a barrel, after settling up $1.07 on Monday.
“With Brent staying above $50, oil is on an upward momentum with the restart of French refineries that were shut on strikes and pipeline attacks in Nigeria,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.
Preliminary work got underway on Monday to restart three of Total’s (TOTF.PA) French oil refineries stopped as part of nationwide strikes against planned changes to employment laws, which would lead to higher crude demand.
Nigerian production of Bonny Light crude is down by an estimated 170,000 barrels per day (bpd) following recent attacks on pipeline infrastructure, according to an industry source close to the matter.
Oil also got support from a weak dollar, which was wallowing near four-week lows against a basket of currencies. Federal Reserve Chair Janet Yellen said interest rate hikes are coming but gave little sense of when.
U.S. commercial crude oil inventories likely fell by 3.5 million barrels last week, marking a third straight weekly fall, a preliminary Reuters poll showed ahead of the data by the American Petroleum Institute due out at 2030 GMT (04:30 p.m. EDT).
Market intelligence firm Genscape reported a drawdown of 1.08 million barrels at the Cushing, Oklahoma delivery point for WTI futures during the week to June 3, traders who saw the data said.
Traders were also awaiting China’s trade data for May due out on Wednesday for fresh incentives. A series of Chinese indicators are expected to reinforce views that the world’s second-largest economy is steadying, but not gaining momentum.
U.S. Treasury Secretary Jack Lew said in Beijing that concerns about China’s business climate have grown due to a more complex regulatory environment and the Chinese government should open the door wider to foreign investments.