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Crude oil futures decline ahead of Fed, U.S. supply data

Published 10/29/2013, 05:04 AM
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Investing.com - Crude oil futures declined on Tuesday, as investors remained cautious ahead of the Federal Reserve's two-day policy meeting, due to begin later in the day.

Traders also 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 USD98.34 a barrel during European morning trade, down 0.35%.

New York-traded oil futures traded in a range between USD98.15 a barrel, the daily low and a session high of USD98.62 a barrel.

The December contract ended 0.85% higher on Monday to settle at USD98.68 a barrel.

Oil futures were likely to find support at USD95.95 a barrel, the low from October 24 and resistance at USD100.29 a barrel, the high from October 22.

The Fed was not expected to announce any change to the rate of its USD85 billion-a-month asset purchase program after its meeting on Wednesday. The U.S. central bank was instead expected to delay plans to start tapering stimulus until well into next year.

Data released on Monday showed that U.S. industrial production rose 0.6% in September, coming in above expectations for a 0.4% rise.

However, a separate report showed that U.S. pending home sales fell 5.6% in September, down for the fourth consecutive month.

Later in the day, the U.S. was to produce data on retail sales and producer price inflation, as well as a report on consumer confidence.

Market players have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond-purchasing program.

Oil traders also looked ahead to the release of fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.

The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 3.3 million barrels.

Crude oil inventories in the U.S. rose by 5.2 million barrels last week to hit 379.8 million, the highest level since June 28.

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.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery dipped 0.25% to trade at USD109.34 a barrel, with the spread between the Brent and crude contracts standing at USD11.00 a barrel.

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