SINGAPORE, July 24 (Reuters) - Oil fell on Wednesday, for a second straight
session, as a U.S. government report showed larger-than-expected increases in
inventories of gasoline and distillates.
The U.S. government's Energy Information Administration (EIA) said gasoline
stocks rose by 2.9 million barrels last week against forecasts of a 300,000
barrels build.
Stocks of distillates, which include diesel, rose by 2.4 million barrels
when they had been forecast to rise by 2.3 million barrels.
"This looks like another pretty bearish report with a large build in
distillates and gasoline ... People are not driving as much, it looks like
consumers are slowing demand," said Rob Kurzatkowski, futures analyst at
OptionsXpress in Chicago.
U.S. crude dollar, which may have reduced the
appeal of commodities to some investors, analysts said. The dollar hit a
two-week high against the euro on Wednesday. [USD/]
Analysts who chart past price movements to predict future direction said the
market could head lower for now, given that the next area of support is around
$120 to $122 a barrel for U.S. crude.
"In addition to Dolly's likely fade into oblivion, we suspect that crude's
technicals are not helping matters much either," analysts at MF Global said in a
report.
Even after its pullback from the July 11 record high of $147.27, oil has
rallied almost 30 percent in 2008 and is up from $20 in early 2002, driven by
demand from fast-growing economies like China.
Hurricane Dolly was still expected to come ashore well away from the key
offshore platforms, even after it was upgraded to the Atlantic season's second
hurricane late on Tuesday.
Oil companies working in the U.S. Gulf of Mexico shut 5 percent of oil and
natural gas output by Tuesday but those outages were expected to be short-lived.
[ID:nN22287387] (Additional reporting by Annika Breidthardt, editing by William
Hardy) Keywords: MARKETS OIL
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