Investing.com - Crude oil pared gains in Asian trade Wednesday, falling back after a strong showing by Wall Street and hopes that the U.S. Federal Reserve would soon vow action to boost the economy of the world’s largest energy consumer.
On the New York Mercantile Exchange light, sweet crude futures for October delivery traded at USD85.58 a barrel during early Asian trade, falling 0.59%, after hitting a daily high of USD86.14.
Stocks on Wall Street rose for the second day, as dealers remained optimistic that the Federal Reserve would signal some additional movement on quantitative easing at its meeting later this week in Jackson Hole, Wyoming.
Further upward momentum for oil was boosted by news that rebels in Libya had failed to secure a victory and topple leader Moammar Gadhafi, further postponing any resumption of full oil production capacity in the North African country.
In Nigeria, production was reduced by operator Royal Dutch Shell after an attack on one of the company’s pipelines, reducing exports by some 200,000 barrels per day.
Meanwhile, the industry-backed American Petroleum Institute Tuesday said that U.S. supplies dropped by 3.34 million barrels to 347 million barrels last week.
A rising U.S. dollar contributed to lower oil prices as dollar-denominated oil futures contracts tend to fall when the dollar gains.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.15% to 73.98.
On the ICE Futures Exchange Brent oil futures for October delivery fell 0.29% to trade at USD109.73.
The U.S. government’s weekly crude oil and gasoline inventory report was due out later Wednesday from the Energy Information Administration.