Oil prices retreated Wednesday amid caution that a U.S. fuel supplies report due later in the session will show increases in oil product inventories and a draw in crude oil stocks.
Light, sweet crude for July delivery, which expires later Wednesday, lost 17 cents to US$68.93 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore.
The contract rose a penny to settle at US$69.10 a barrel Tuesday, the highest close since Sept. 1.
Analysts surveyed by Dow Jones Newswires expect the U.S. Department of Energy data to show gasoline stocks rose 1 million barrels last week. Distillate inventories, which include heating oil and diesel fuel, are expected to have increased 900,000 barrels.
Crude oil stocks are expected to have fallen 150,000 barrels last week. Refinery utilization is tipped to have increased 0.6 percentage points.
Market participants were especially eyeing refinery utilization rates. The rates sparked a rally late last week when the weekly inventory report showed use rates fell 0.4 percentage points in the week ended June 8 when analysts had expected an 0.8-point increase.
The report surprised energy traders and attracted hedge fund buying, driving oil prices to a nine-month high Friday.
"I think any build of less than one full percentage point is going to be looked at as somewhat bullish," Peter Beutel at Cameron Hanover said of this week's coming report on refinery rates.
Also supporting prices was news out of Nigeria, Africa's biggest oil producer and one of the top overseas suppliers to the United States. Labor unions there rejected a government offer to halve a price hike on automobile fuel only hours before a strike protesting the increase was set to begin.
The unions are threatening to target strike action at the oil industry, with the aim of cutting oil exports that count for 90 percent of the government's income.
Recent attacks by villagers and gunmen cut supply at two Nigerian oil facilities. Hundreds of angry villagers chased workers away from a Chevron Corp. oil-transfer facility Monday in southern Nigeria. Gunmen also seized some two dozen Nigerian workers and security forces at a flow station operated by Italian energy giant Eni SPA's subsidiary Agip.
Heating oil futures lost 0.22 cent to US$2.0246 a gallon (3.8 liters) while natural gas prices edged up 1.1 cents to US$7.530 per 1,000 cubic feet.
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