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Crude oil hovers close 4-week high ahead of supply data

Published 08/31/2011, 03:59 AM
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Investing.com – Crude oil futures fluctuated between small gains and losses on Wednesday, but remained supported close to a four-week high after industry data painted a mixed picture of U.S. energy demand, while expectation for additional stimulus measures from the Federal Reserve underpinned demand for commodities. 

On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at USD88.73 a barrel during European morning trade, edging 0.08% lower. 

The crude contract traded between a range of USD88.36, the daily low and a daily high of USD88.97, just below the previous session’s four-week high of USD89.17 a barrel.

The American Petroleum Institute, an industry group, said on Tuesday that U.S. crude inventories rose the most since March last week, climbing by 5.1 million barrels, well above expectations for a 0.4 million barrel increase.

However, total gasoline supplies dropped by 3.1 million barrels to 210.8 million, surpassing expectations for a 1.1 million barrel drawdown.

Energy traders have been closely eyeing gasoline stockpiles in recent weeks to gauge the strength of U.S. demand, as the U.S. driving season is currently in the period of peak gasoline demand.

Later in the day, the U.S. Energy Department was to release its closely-watched crude oil inventories report for the week ended August 26.

The data was expected to show that U.S. crude oil stockpiles rose by 0.9 million barrels, while gasoline supplies were forecast to drop by 0.9 million barrels. 

Prices remained supported after minutes of the Fed’s August policy setting meeting published Tuesday revealed that some policy makers favored more aggressive action to stimulate the U.S. economy, including buying more government bonds.

This added to speculation that the Fed may act after its extended two-day meeting in September.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery rose 0.39% to trade at USD114.47 a barrel, up USD25.74 on its U.S. counterpart.

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