Crude-oil futures moved lower in electronic trade Wednesday after data showing the weekly drop in U.S. crude inventories came in shy of estimates. Benchmark U.S. crude oil for September delivery CLU3 -0.29% slipped 24 cents, or 0.2%, to $106.59 a barrel, surrendering a portion of its 72-cent advance in Tuesday's New York Mercantile Exchange trading session. Likewise, September Brent crude UK:LCOU3 -0.22% saw a more sizeable drop of 43 cents, or 0.4%, to $109.39 a barrel, erasing roughly half of its 85-cent gain on Tuesday. The losses for Nymex crude flowed out of a smaller-than-expected drop in U.S. oil supplies for the week ended Aug. 9. Reports cited the American Petroleum Institute as saying crude stocks fell by 999,000 barrels for the week, missing a consensus estimate for a 1.5 million-barrel decrease, according to a Platts survey of analysts. Citi Futures analysts, however, saw the inventory drop as "within the range of expectations," but saw the larger outlook for the commodity as more negative than positive. "Although we think crude oil may continue to work higher in the near term, we consider it overvalued, given its forward likely global supply/demand surplus and believe it has become a crowded trade," Citi Futures said in a note late Tuesday after the API data. "Upside potential may be limited to $1 to $2, compared with an intermediate-term downside risk that may be $15 or more," they wrote. The API report came ahead of the U.S. Energy Information Administration's own weekly inventory data — which are generally given more weight by traders — due out later Wednesday at 10:30 a.m. U.S. Eastern time. The dollar offered little support or resistance for the oil market, with the ICE dollar index DXY -0.02% trading almost flat at 81.780, compared to 81.772 late Tuesday in North America. In other energy trading Wednesday, September gasoline RBU3 -0.14% traded 0.2% lower — a loss of less than a penny — to hold at $2.94 a gallon, while September heating oil HOU3 -0.23% also pulled back by about 1 cent, or 0.2%, to $3.04 a gallon. The API data reportedly showed stockpiles up 1.7 million barrels against estimates from the Platts survey for a drop of 2 million barrels, helping weigh on the futures. Distillate supplies, including heating oil, rose by 1.1 million barrels, roughly in line with expectations for a 1 million barrel build-up. Overall, the API report was "mixed," with the gasoline-supply rise bearish, but the supply draw at Cushing, Okla., the delivery hub for Nymex futures, "supportive," according to Price Futures Group senior market analyst Phil Flynn. Meanwhile, September natural gas NGU13 +0.37% offered a bright spot, adding 1 cent, or 0.4%, to $3.30 per million British thermal units. Source: Marketwatch
