Reuters: Most Read Articles: Brent slips below $104 as Bernanke offers no signal on stimulus

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Brent slips below $104 as Bernanke offers no signal on stimulus Jul 18th 2012, 03:26 An employee holds a gas pump at a gas station of Hyundai Oilbank in Seoul June 15, 2012. Credit: Reuters/Choi Dae-woong By Manash Goswami SINGAPORE | Tue Jul 17, 2012 11:26pm EDT SINGAPORE (Reuters) - Brent crude slipped below $104 a barrel on Wednesday, snapping five days of gains as Federal Reserve Chairman Ben Bernanke offered no signs of further monetary stimulus to boost growth in the world's top oil consumer. Oil also slipped as a 16 percent increase in prices from the lows for the year touched last month prompted some investors to book profits. Broader markets, from Asian shares to the euro, edged higher as Bernanke in his testimony to the Senate Banking Committee left the door open for more stimulus. Brent crude slipped 67 cents to $103.33 a barrel by 0258 GMT, after settling 63 cents higher. U.S. oil slipped 40 cents to $88.82 a barrel after ending 79 cents higher. "Bernanke's comments were in line with the last set of minutes - examining ways of doing more should that be necessary," said Ric Spooner, chief market analyst at CMC Markets in Sydney. "Oil has recovered from its June lows pretty close to its medium-term equilibrium and that is why we are seeing a bit of softening. There is some profit-taking." Bernanke said the Fed stands ready to offer more stimulus as needed but stopped short of signaling action in the near term.. He also said recovery was being held back by anxiety over Europe's debt crisis and expressed unease over a stagnant jobs market. Investors are now awaiting data on crude stockpiles in the United States due later in the day from the Energy Information Administration (EIA) to confirm an industry report that inventories have fallen more than expected. Crude inventories fell by 2 million barrels in the week to July 13, gasoline stocks fell by 116,000 barrels and distillate stocks rose by a sharp 3.4 million barrels, data from the American Petroleum Institute showed. <API/S> A Reuters poll of 10 analysts forecast a 1.2 million barrel drop in domestic crude inventories. Gasoline inventories were forecast up 1.2 million barrels, on average, while distillate stocks were projected to rise 1.5 million barrels. <EIA/S> "Seasonality appears to be a positive influence with draw-downs on high U.S. crude oil stocks, to fuel the peak of the U.S. driving season, encouraging buying," analysts at ANZ said in a note. Brent will retrace into a range of $101.24-$102.07 per barrel, as suggested by its wave pattern and the RSI indicator, while U.S. oil faces resistance at $89.50 per barrel and may revisit its Tuesday low of $87.41, according to Reuters technical analyst Wang Tao. <TECH/C> SUPPORTING PRICES Further declines in the dollar may also support oil, Spooner said. The greenback has been under pressure on expectations the Federal Reserve would go for a third round of bond purchases, or quantitative easing, to support the economy. Any weakness in the currency could boost dollar-denominated commodities. "The Fed hasn't explicitly talked about another stimulus, nevertheless, there is an easing bias," Spooner said. Worries about supply disruption from the Middle East due to simmering tensions over Iran's disputed nuclear program are also supporting prices. Iran said it would insure any foreign ships that enter its waters, in an effort to skirt a European Union ban on insuring ships carrying Iranian crude that has hampered the country's oil exports. The EU enacted a ban on July 1 on insurance for tankers carrying Iranian oil, preventing EU insurers and reinsurers from covering tankers carrying Iran's crude anywhere in the world. (Editing by Himani Sarkar) Link this Share this Digg this Email Reprints

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