Brent flat, U.S. crude down; OPEC meeting eyed

Wed Jun 13, 2012 4:08pm EDT
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By Gene Ramos

NEW YORK (Reuters) - Brent crude oil futures closed near flat and U.S. crude fell about 1 percent in choppy trading on Wednesday as weak U.S. economic data and worries about the euro zone's finances outweighed a drawdown in U.S. crude inventories.

Markets are awaiting a policy meeting of the Organization of the Petroleum Exporting Countries (OPEC) on Thursday in Vienna, with the producer group anticipated to keep its current output target of 30 million barrels per day intact.

Prices surged to session highs in the morning after U.S. government data showed that domestic crude stockpiles edged down 191,000 barrels last week, the second straight week of declines.

The drawdown, though smaller than expected, included a drop from record levels in stocks at the Cushing, Oklahoma, delivery point for U.S.-traded crude futures. <EIA/S>

The report from the U.S. Energy Information Administration also showed refinery operations shot up to 92 percent of capacity, the highest since August 2007.

While supportive, the report failed to overcome dimmer prospects for oil demand after a drop in U.S. retail sales in May for a second straight month in the world's largest economy.

In London, ICE July Brent crude settled at $97.13 a barrel, just a cent lower but its fifth consecutive drop and marking a fresh 16-month low. Brent has fallen 24 percent from its year high of $128.40 hit in March.

U.S. July crude slid 70 cents to close at $82.62 a barrel, the lowest settlement for U.S. front-month crude since October 6 last year. U.S. crude has dropped 25 percent from its year high of $110.55 also struck in March.   Continued...

A worker collects crude oil sample at an oil well operated by Venezuela's state oil company PDVSA in Morichal July 28, 2011. REUTERS/Carlos Garcia Rawlins