Investing.com - Crude oil futures bounced off the previous session’s four-week 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.
Gains were limited ahead of the conclusion of the Federal Reserve’s policy meeting, with many investors expecting the central bank to start tapering the scale of its bond-buying program.
On the New York Mercantile Exchange, light sweet crude futures for delivery in November traded at USD105.34 a barrel during European morning trade, up 0.5%.
The November contract settled down 1.3% at USD104.82 a barrel on Tuesday, after falling to a session low of USD104.40, the weakest level since August 23.
New York-traded oil futures traded in a range between USD104.56 a barrel, the daily low and a session high of USD105.47 a barrel.
Oil futures were likely to find support at USD103.56 a barrel, the low from August 22 and resistance at USD107.29 a barrel, the high from September 16.
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 declined by 1.4 million barrels last week, while gasoline inventories were forecast to rise by 0.4 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell by 0.3 million barrels last week, compared to expectations for a decline of 1.5 million barrels.
The API also said gasoline stockpiles declined 0.6 million barrels.
Market players also looked ahead to the conclusion of the Fed’s policy meeting later in the session, amid expectations the central bank will start tapering its USD85-billion-a-month bond-buying program.
Market analysts expect the Fed will start cutting monthly bond purchases by USD10 billion to USD75 billion when it concludes its two-day policy meeting on Wednesday.
Monthly purchases of Treasuries will be scaled back by USD10 billion to USD35 billion, while mortgage-bond buying will remain unchanged at USD40 billion.
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.
Oil prices have been on a downward trend in recent sessions as diminishing fears over U.S. military intervention in Syria continued to weigh after the U.S. and Russia reached a diplomatic solution on how to handle Syria’s chemical weapons over the weekend.
U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov agreed on a framework for Syria to destroy its chemical weapons stockpile by the middle of 2014.
Oil prices surged to a 27-month high of USD112.22 a barrel on August 28 amid indications the U.S. was close to taking military action against Bashar al-Assad’s government.
While Syria is not a major oil producer, investors fear that the two-year-old civil war could spill over to affect oil supplies in nearby countries.
Countries in the Middle East were responsible for nearly 35% of global oil production in 2012.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for November delivery were little changed to trade at USD108.21 a barrel, with the spread between the Brent and crude contracts standing at USD2.87 a barrel.
London-traded Brent futures fell to a six-week low of USD107.43 a barrel on Tuesday, amid easing concerns over a disruption to supplies from Libya.
Gains were limited ahead of the conclusion of the Federal Reserve’s policy meeting, with many investors expecting the central bank to start tapering the scale of its bond-buying program.
On the New York Mercantile Exchange, light sweet crude futures for delivery in November traded at USD105.34 a barrel during European morning trade, up 0.5%.
The November contract settled down 1.3% at USD104.82 a barrel on Tuesday, after falling to a session low of USD104.40, the weakest level since August 23.
New York-traded oil futures traded in a range between USD104.56 a barrel, the daily low and a session high of USD105.47 a barrel.
Oil futures were likely to find support at USD103.56 a barrel, the low from August 22 and resistance at USD107.29 a barrel, the high from September 16.
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 declined by 1.4 million barrels last week, while gasoline inventories were forecast to rise by 0.4 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell by 0.3 million barrels last week, compared to expectations for a decline of 1.5 million barrels.
The API also said gasoline stockpiles declined 0.6 million barrels.
Market players also looked ahead to the conclusion of the Fed’s policy meeting later in the session, amid expectations the central bank will start tapering its USD85-billion-a-month bond-buying program.
Market analysts expect the Fed will start cutting monthly bond purchases by USD10 billion to USD75 billion when it concludes its two-day policy meeting on Wednesday.
Monthly purchases of Treasuries will be scaled back by USD10 billion to USD35 billion, while mortgage-bond buying will remain unchanged at USD40 billion.
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.
Oil prices have been on a downward trend in recent sessions as diminishing fears over U.S. military intervention in Syria continued to weigh after the U.S. and Russia reached a diplomatic solution on how to handle Syria’s chemical weapons over the weekend.
U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov agreed on a framework for Syria to destroy its chemical weapons stockpile by the middle of 2014.
Oil prices surged to a 27-month high of USD112.22 a barrel on August 28 amid indications the U.S. was close to taking military action against Bashar al-Assad’s government.
While Syria is not a major oil producer, investors fear that the two-year-old civil war could spill over to affect oil supplies in nearby countries.
Countries in the Middle East were responsible for nearly 35% of global oil production in 2012.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for November delivery were little changed to trade at USD108.21 a barrel, with the spread between the Brent and crude contracts standing at USD2.87 a barrel.
London-traded Brent futures fell to a six-week low of USD107.43 a barrel on Tuesday, amid easing concerns over a disruption to supplies from Libya.