LONDON—Crude futures fell in Europe Thursday due to a firming dollar and cautious sentiment ahead of key U.S. oil inventories data due at 11 a.m. EST (4 p.m. GMT).
Trading activities are muted, with crude futures largely stuck in a narrow range. Some traders have opted to cash in their profits after overnight gains, as the strength in the dollar is expected to persist, while the euro is still pressured by lingering concerns over Greece's debt problems.
Meanwhile, the American Petroleum Institute released bearish U.S. oil inventories data Wednesday, with distillates stocks posting a surprising build of 1.3 million barrels despite recent cold snaps in the country. Traders are now closely watching whether the Energy Information Administration will confirm the trend in its widely watched data.
Crude-oil inventories are expected to rise by 1.8 million barrels in the week ended Feb. 12, while gasoline stocks are likely up 1.5 million barrels and distillates stocks may fall by 1.5 million barrels, according to the mean of forecasts of 16 analysts surveyed by Dow Jones Newswires.
At 11:30 a.m. GMT, the front-month April Brent contract on London's ICE futures exchange was down $0.83 at $75.44 a barrel.
The front-month March light, sweet crude contract on the New York Mercantile Exchange was trading $0.71 lower at $76.62 a barrel.
The ICE's gasoil contract for March delivery was down one dollar at $610.00 a metric ton, while Nymex gasoline for March delivery was down 1.40 cents at $1.9931 a gallon.
Tension over Iranian nuclear issues remain, with Iran's ambassador to the International Atomic Energy Agency saying recently that the country won't bow to Western pressure to abandon its atomic activities.
"Iran will never give up enrichment--at any price. Even the threat of military attack will not stop us," Ali Asghar Soltanieh said in an interview with the New Statesman magazine.
But these defiant remarks failed to give the oil market any boost. "Jitters over Iran are still supportive, but most of it is priced in already," said Andrey Kryuchenkov, vice president of commodities research of VTB Capital.
"By the end of this week, these developments will be fully priced in, and it is unlikely that matters will deteriorate any further from here unless the ongoing negotiations completely collapse," he added.
If there are no surprises from the EIA data later Thursday, crude futures will continue to take cue from the dollar in coming days.
"U.S. macro data slated for release over the next two days should give the greenback further direction, while developments in Europe should add further color," said Edward Meir, senior commodity analyst at MF Global.
"In our view, things have hardly taken a turn for the better with respect to the Greek situation," Mr. Meir said.
