Oil prices little changed as dollar gains, US drawdown seen

The US commercial crude oil stocks fell by around 2.5 million barrels to 538.8 million in the week ended May 20, a preliminary Reuters analysts' poll taken ahead of weekly industry and official inventory data showed on Monday.

The US crude futures edged down 4 cents to $48.04 a barrel by 0016 GMT, having settled down 33 cents in the previous session. Image Source: Reuters

Oil prices were little changed in thin early Asian trade on Tuesday as a firmer US dollar weighed on oil markets while a likely drawdown in the US crude and gasoline stockpiles pointed to stronger demand ahead of the US summer driving season.

The US crude futures edged down 4 cents to $48.04 a barrel by 0016 GMT, having settled down 33 cents in the previous session.

Brent crude futures dipped 4 cents to $48.31 after closing down 37 cents in the previous session, with both contracts finishing with modest losses for a fourth straight session.

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The US commercial crude oil stocks fell by around 2.5 million barrels to 538.8 million in the week ended May 20, a preliminary Reuters analysts' poll taken ahead of weekly industry and official inventory data showed on Monday.

Gasoline stocks likely fell 1.3 million barrels last week, while distillate inventories, which include heating oil and diesel fuel, likely decreased by a million barrels, the poll showed.

The American Petroleum Institute (API) is due to release its inventory data later on Tuesday while the US Department of Energy's Energy Information Administration (EIA) data is due on Wednesday.

The dollar index rose marginally higher against a basket of currencies on Tuesday, as investors continued to factor in an increased chance of a near-term US interest rate rise.

A stronger greenback makes dollar-priced commodities more expensive for holders of other currencies.

Still, the US data economic overnight was disappointing, with the preliminary Markit manufacturing PMI in May falling to 50.5, the lowest level this year.

"Markit PMI data continued to point to a difficult period for manufacturing as Q2 unfolds," ANZ said in a market report on Tuesday.

Crude exports from Iraq's southern oil fields have fallen by more than 200,000 barrels per day (bpd) to around 3.15 million barrels so far in May, according to an industry source and loading data. That followed the previous month's near-record of 3.36 million barrels per day (bpd).

Libya's crude production has risen above 300,000 barrels per day (bpd) after the reopening of the Marsa al Hariga export terminal in the east of the country late last week, a spokesman for the Tripoli-based National Oil Corporation (NOC) said on Monday.

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