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Crude oil trades near 4-1/2-month low ahead of U.S. supply data

Published 11/05/2013, 03:55 AM
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Investing.com - Crude oil futures traded near the previous session’s four-and-a-half-month low on Tuesday, 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 USD94.54 a barrel during European morning trade, down 0.1%.

New York-traded oil futures traded in a range between USD94.37 a barrel, the daily low and a session high of USD94.91 a barrel.

The December contract fell to USD94.06 a barrel on Monday, the weakest lvel since June 26, before ending at USD94.62 a barrel, little changed on the day.

Oil futures were likely to find support at USD93.71 a barrel, the low from June 26 and resistance at USD96.64 a barrel, the high from November 1.

Oil traders 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 1.8 million barrels.

Crude oil inventories rose by 4.1 million barrels last week to 383.9 million barrels, the highest level since June.

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.

Market players also eyed the release of key U.S. economic data later in the week to help assess the timing for a reduction in the Fed’s bond-purchasing program.

The U.S. is set to release preliminary data on third quarter economic growth on Thursday, while October’s highly-anticipated nonfarm payrolls report is scheduled for Friday.

The Fed sounded more optimistic than anticipated in its assessment of the economy following its policy-setting meeting last week, sparking speculation the central bank could start tapering stimulus at its December meeting.

Oil traders 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 purchases.

The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery dipped 0.05% to trade at USD106.19 a barrel, with the spread between the Brent and crude contracts standing at USD11.65 a barrel.

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