BANGKOK – The price of oil dropped to near $105 a barrel Wednesday as investors awaited a report on U.S. crude inventories and the Federal Reserve chairman's congressional testimony.
Benchmark crude for August delivery was down 54 cents at $105.46 at early afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell 32 cents to finish Tuesday at $106 a barrel.
This week's direction in oil futures could be determined by fresh information on U.S. stockpiles.
Data due Wednesday for the week ending July 12 is expected to show a decline of 2.5 million barrels in crude oil stocks and no change in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos. That would be the third straight week of a drop in U.S. crude supplies, suggesting an increase in demand.
Markets are also looking to Ben Bernanke's remarks to Congress for any new insight into when the Federal Reserve will start scaling back its monthly purchases of bonds and other assets that are aimed at keeping interest rates low and encouraging an economic recovery.
The withdrawal of that stimulus could push the dollar higher as U.S. interest rates would tend to rise. That in turn might weigh on the oil price since the commodity is traded in dollars.
In London, Brent crude was down 38 cents to $107.76 a barrel on the ICE Futures exchange.
In other energy futures trading on Nymex:
— Wholesale gasoline fell 2.9 cents to $3.024 per gallon.
— Heating oil shed 1.1 cents to $3.035 a gallon.
— Natural gas dropped 2.1 cents to $3.656 per 1,000 cubic feet.