Singapore: Brent oil hovered near $111 a barrel on Tuesday as investors tread cautiously given debt issues in the euro zone and ahead of weekly US data expected to show builds in US crude and gasoline stocks.
A near 5% slide in gasoline futures on Monday dragged crude down as fears that floods will hit refinery operations in Louisiana eased after a spillway along the Mississippi River was opened during the weekend.
ICE Brent for July was up 15 cents at $110.99 by 11:38am, US crude futures for June delivery fell 9 cents to $97.28 a barrel.
“EU finance ministers have approved a €78 billion emergency programme for Portugal, but concerns over sovereign debt issues in Europe remain,” ANZ analysts led by Mark Pervan said in a note.
The dollar index , a measure of the greenback’s value against a basket of currencies, was up 0.18%, making dollar-denominated commodities more expensive for holders of other currencies.
A stronger US dollar versus the euro as euro zone debt issues resurfaced pushed oil lower earlier on Tuesday, said Yusuke Seta, a commodity sales manager at Newedge Japan.
Sexual assault charges against International Monetary Fund chief Dominique Strauss-Kahn in New York over the weekend raised fears a new head of the group could be tougher on heavily indebted peripheral euro-zone members.
US gasoline futures settled below $3 a gallon for the first time since March as fears of refinery outages during the driving season were allayed.
Eight large Louisiana refineries equal to 12% of national capacity appear to be at lower risk of flooding after US Army engineers opened a key floodgate over the weekend, Senator Mary Laudrieu said.
“A drop in US gasoline prices for the first time in eight weeks was a drag on the rest of the energy group,” ANZ said.
US crude oil inventories likely rose for the fourth straight week last week as higher imports outpaced refinery demand, a preliminary Reuters poll ahead of weekly industry and government reports showed on Monday.
Crude inventories were seen up 1 million barrels in the week to 13 May, while distillate and gasoline stocks were seen up 1.1 million barrels and 1.3 million barrels respectively, the poll showed.