Oil prices fall before Bernanke

Global oil prices dipped Wednesday amid a strong dollar and as traders looked ahead to more testimony from Federal Reserve Chairman Ben Bernanke and the latest snapshot of US energy inventories. Brent North Sea crude for delivery in September slid 34 cents to stand at $103.66 a barrel in London midday trade. New York's main contract, light sweet crude for August retreated 49 cents to $88.73 a barrel. Prices were falling after Bernanke on Tuesday gave a gloomy outlook on the US economy and as he prepared to offer more assessment later Wednesday. The Fed chief on Tuesday offered a bleak forecast on jobs and growth in the United States -- the world's biggest consumer of oil -- and disappointed investors by not clearly signalling that fresh economic stimulus was on the way. After the US economy grew at a modest rate of around two percent in the first quarter of this year, Bernanke said "available indicators point to a still-smaller gain in the second quarter." Despite the gloom, the dollar rose against the European single currency on Wednesday, making dollar-price crude more expensive for buyers using weaker currencies -- dampening demand and prices. Later on Wednesday, the US government's Energy Information Administration (EIA) publishes data on American crude oil inventories for the week ending July 10. "Crude oil prices are on a consolidation mode today, ahead of the release of the EIA oil figures," said Myrto Sokou, an analyst at Sucden brokers. Crude price losses were meanwhile capped by geopolitical concerns after oil-producer Iran warned against a US defence buildup in the Gulf. The Islamic republic on Tuesday warned against the US military deployment in the Gulf after the fatal shooting of an Indian fisherman by a US Navy ship in waters off Dubai. US defence officials said the fishing boat had ignored warnings not to approach the refuelling ship USNS Rappahannock and that sailors on board the American vessel feared it could pose a threat. The US navy has been building up its forces in the oil-rich Gulf region amid mounting tensions with Iran over the latter's controversial nuclear programme.