Oil steadied on Wednesday with investors more concerned by the health of the US economy than prospect of declining fuel stocks in the world’s top consumer.
US crude edged up 3 cents to $71.76 a barrel by 0900 GMT while London Brent was off 2 cents at $70.53.
The deepening crisis in US subprime mortgages – loans made to high-risk borrowers – has rattled the financial sector and knocked US consumer confidence to its lowest level in nearly two years.
The subprime meltdown has also made it tougher for OPEC to chart oil policy by clouding the picture on demand growth.
OPEC Secretary-General Abdullah al-Badri said the subprime fallout had clouded the oil demand outlook.
“The situation in the past couple of weeks has become a lot more serious,” OPEC Secretary-General Abdullah al-Badri told Reuters on Tuesday.
For now, however, Badri said the world oil market was well supplied, suggesting OPEC would hold output steady when it meets on September 11 in Vienna.
Some analysts insist the Organization of the Petroleum Exporting Countries must turn up the taps so supplies can keep pace with demand this winter.
US oil inventory data, to be released later on Wednesday, are expected to show a 1.7 million barrel drop in gasoline stocks and an 800,000 barrel decline in crude inventories in the week to Aug. 24, according to a Reuters poll of analysts.
“At the moment, oil is quite insulated from what is happening in the equity and credit markets, by all accounts the market is very tight,” said ANZ analyst Andrew Harrington.
US crude has fallen 9 from its all-time high of $78.77 on August 1 after speculators liquidated positions and some investors worried the global credit crunch would take a wider economic toll and dent oil demand.
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