Oil fell more than $1 today, reversing the previous session's gains, as a rise in the dollar overshadowed a surprise draw in stockpiles in the world's top consumer US.
Brent fell 83 cents to $113.40 a barrel, after settling $3.26 a barrel higher at $114.21. US oil slipped $1.13 to $94.29.
Markets from metals to US equities dropped after the Federal Reserve yesterday cut its growth forecasts for the world's biggest economy. The dollar recovered earlier in the day as chairman Ben Bernanke gave no hint of any further stimulus, weighing on most commodities from gold to oil.
The dollar gained 0.4 per cent versus a basket of currencies today.
The Fed estimated the economy should grow 2.7 per cent to 2.9 per cent this year, down from a forecast range of 3.1 to 3.3 per cent made in April. It also cut its 2012 growth forecast to a range of 3.3 per cent to 3.7 per cent.
Oil rose 3 per cent yesterday, boosted by data showing a drop in US crude.
Gasoline inventories unexpectedly dropped 464,000 barrels to 214.6 million barrels, compared with predictions of a 1 million barrel increase, according to data from the US Energy Information Administration's weekly report. Crude stocks fell 1.7 million barrels as refinery utilisation increased by the most since December to hit a ten-month high.
Markets will today watch for data on jobless benefit claims and new home sales. More importantly, they will look for signs of how the broader economy is faring, with the final estimate of the nation's first quarter real GDP due tomorrow.
Reuters
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