Crude Falls On Higher Supplies, Markets Await Fed Meeting

Crude oil fell on Tuesday amid speculations gasoline and distillate stockpiles increased last week in the US, the world’s largest oil consumer. Selling was also triggered by the rising caution ahead of the key US Fed meeting that starts today.

Investors await tomorrow the details of the Federal Reserve meeting in which the decision to taper stimulus, which is a major driver of investment in global commodities, may be taken, weighing on prices.

However, the prolonged halt in Libyan exports, after the country failed this week to reopen its ports, amid an improving demand outlook following some strong economic data, may prevent oil prices from falling further.

Global manufacturing and business activity expanded in December while the US retail sales and employment numbers drew an upbeat picture of the world`s biggest economy, which revived hopes of steady oil demand growth.

The Energy Information Administration report tomorrow may show that gasoline inventories rose by 1.75 million barrels last week, distillates rose by 240,000 barrels while crude stockpiles fell for third week by 3.25 million.

The American Petroleum Institute (API) is scheduled to release separate stockpile data today. The API collects data on a voluntary basis from operators of refineries, bulk terminals and pipelines.

Also weighing on oil prices was the European Union, which pledge to suspend some of the sanctions imposed on Iran as soon as the UN nuclear confirms that Tehran has curbed its atomic work under the deal reached last month.

- WTI crude oil futures for January is trading around $ 97.28 a barrel after falling $0.20

- Brent futures for January settlement is trading around $ 109.28 a barrel after falling $0.13

- Natural gas is trading at $ 4.285 per cubic feet after rising 0.14%

- Gasoline is trading at $ 2.6495 per cubic feet after rising 0.22%

- Heating oil (diesel) is trading at $ 2.9900 a gallon after falling 0.01%