US crude oil inventories probably fell by 1.4 million barrels last week, extending a decline for the sixth time in a row as refinery utilisation rose, a Reuters poll of analysts showed. The poll also called for a 200,000 barrel drop in gasoline supplies and a 1.9 million barrel increase in distillates stocks.
The US Energy Information Administration will release inventory data for the week to June 20 on Wednesday at 1435 GMT. A weak dollar, worries of further supply disruptions from Nigeria as well as simmering tensions between Iran and Israel also kept oil prices near record levels, analysts said. The dollar held steady against the yen and euro on Wednesday after dipping the previous day as a report showed that US consumer confidence had plunged to a 16-year low, raising more concerns about the economy.
Markets are eyeing the dollar ahead of the US Federal Reserve's interest rate decision on Wednesday. The Fed began a two-day policy meeting on Tuesday and is expected to leave its benchmark interest rate unchanged. In Nigeria, Royal Dutch Shell said it restarted production at its 220,000 barrels per day Bonga offshore field after an attack by militants last week. A senior UN official appointed by Nigeria to help end unrest in the oil-producing Niger Delta said on Tuesday he would seek a 90-day truce with militants as a first step towards formal peace talks.
Tensions between Israel and Iran over Tehran's nuclear programme are also keeping supply jitters alive. Analysts are about threats to the Straits of Hormuz, a narrow waterway separating Iran from the Arabian Peninsula through which roughly 40 per cent of the world's traded oil flows.
