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Crude oil futures drop below USD98-a-barrel ahead of U.S. supply data

Published 10/23/2013, 03:57 AM
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Investing.com - Crude oil futures fell to a fresh three-and-a-half-month low on Wednesday, as traders looked ahead to the release of key U.S. weekly supply data to gauge the strength of oil demand from the world’s largest consumer.

On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD97.68 a barrel during European morning trade, down 0.65%.

New York-traded oil futures fell to a session low of USD97.63 a barrel earlier, the weakest level since July 2. The December contract ended 1.38% lower at USD98.30 a barrel on Tuesday.

Oil futures were likely to find support at USD96.07 a barrel, the low from July 1 and resistance at USD100.29 a barrel, the high from October 22.

Oil traders were awaiting data from the U.S. government on oil and fuel supplies later in the day to gauge the strength of demand from the world’s largest oil consumer.

The report was expected to show that U.S. crude oil stockpiles rose by 3 million barrels in the week ended October 18, while gasoline inventories were forecast to fall by 250,000 barrels.

After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 3 million barrels last week, while gasoline stockpiles declined 510,000 barrels.

U.S. crude prices have been on a downward trend in recent weeks amid concerns the recent U.S. government shutdown created a drag on economic growth and eroded demand in the world’s largest oil consumer.

On Tuesday, the Department of Labor said that the U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000.

The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August, but this was partially due to more people dropping out of the labor force.

The disappointing data bolstered expectations that the Fed would postpone plans to start scaling back its asset purchase program until at least the beginning of next year.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery inched down 0.45% to trade at USD109.47 a barrel, with the spread between the Brent and crude contracts standing at USD11.79 a barrel, the widest since mid-April.

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