(MENAFN- FxPro) West Texas Intermediate oil futures edged lower on Wednesday, amid speculation weekly supply data due later in the session will show U.S. crude inventories rose at a faster pace than expected last week.
On the New York Mercantile Exchange, crude oil for July delivery shed 55 cents, or 0.91%, to trade at $60.70 a barrel during European morning hours. Prices held in a range between $60.64 and $61.25.
A day earlier, Nymex oil prices rose to $61.58, the most since May 18, before closing at $61.26, up $1.06, or 1.76%, as a broadly weaker U.S. dollar boosted futures.
Wednesday's government report was expected to show that U.S. crude oil stockpiles fell by 1.7 million barrels last week, while gasoline stockpiles were forecast to increase by 0.6 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 1.8 million barrels in the week ended May 29, the second consecutive weekly increase.
According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. fell by 13 last week to 646. The drop marks the 25th straight week of declines and the biggest fall in four weeks.
Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery inched down 29 cents, or 0.45%, to trade at $65.20 a barrel. London-traded Brent prices tacked on 61 cents, or 0.94%, on Tuesday to end at $65.49.
Oil traders are awaiting a critical OPEC meeting in Vienna later in the week. The Organization of Petroleum Exporting Counties is largely expected to keep production levels steady above 30 million barrels per day when it meets on Friday, despite ongoing concerns over ample global supplies.
The spread between the Brent and the WTI crude contracts stood at $4.50 a barrel, compared to $4.23 by close of trade on Tuesday.
In the currency market, the U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was at a more than one-week low of 96.05.
The greenback weakened after data on Tuesday showed that factory orders fell 0.4% in April, confounding expectations for a 0.2% increase. On a year-over-year basis, factory orders dropped 6.4%, the sixth straight monthly decline.
The unexpectedly weak data sparked fresh fears over the outlook for second quarter growth after data last month showed that the U.S. economy contracted 0.2% in the first quarter.
Later in the day, the U.S. was to release the ADP jobs report for May, while the ISM was to report on service sector activity.
Market players were are also waiting for Friday's U.S. nonfarm payrolls report for further clues on when the Federal Reserve may raise interest rates.
A strong U.S. nonfarm payrolls report was likely to bring forward expectations on when the central bank will begin to raise rates, while a weak number could weigh on the dollar by undermining the argument for an early rate increase.
Meanwhile, hopes that Greece will soon reach an agreement with its international lenders on a cash-for-reforms deal boosted the euro.
Greece is due to make a ‚¬305 million payment to the International Monetary Fund on Friday but has warned that it will be unable to make the repayment if a deal is not reached by then.
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