Investing.com - Crude oil futures fell in Asian trading on Wednesday as investors sold on sentiment that the Federal Reserve might not announce plans to stimulate the U.S. economy when a policy meeting wraps up later Wednesday.
The European Central Bank is due to address policy on Thursday and talk it might unveil a rather guarded policy response to battle the debt crisis further sent oil falling.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD87.67 a barrel on Wednesday, down 0.44%, off from a session high of USD87.88 and up from an earlier session low of USD87.66.
Slumping economic growth rates, dismal monthly jobs reports and sluggish consumer spending figures may prompt the Fed to roll out a new round of bond purchases from banks, a monetary stimulus tool known as quantitative easing that weakens the dollar to spur recovery and hiring.
A suddenly weaker dollar makes oil a nicely priced commodity in the eyes of investors holding other currencies, which opens the door for an oil rally.
However, talk the Fed plans to intervene soon has been replaced with talk the Fed may wait until September to decide if the economy merits intervention, which sent oil falling.
Meanwhile, choppy U.S. data revealed an economy limping along its road to recovery and in less need of fuels and energy to grow.
The Chicago purchasing managers’ index rose to 53.7 in July from 52.9 in June, beating out expectations for a decline to 52.4.
In addition, the Conference Board said that its index of U.S. consumer confidence rose to 65.9 in July, from 62.7 in the preceding month, beating expectations for a 61.5 reading.
However, U.S. personal spending came in flat in June, matching May's 0.2% growth and in line with expectations, while personal incomes rose 0.5%, slightly beating out expectations for a 0.4% increase.
Across the Atlantic in Europe, ECB chief Mario Draghi has said he'll do anything to save the currency, though many investors remain wary if the bank will announce outright quantitative easing and opt instead for a round of sovereign bond purchases made with money already circulating in the European economy.
Quantitative easing in the U.S. sees the Fed expand its balance sheet to buy assets, often described as printing money out of thin air, and packs more of a punch.
The European Central Bank's mandate requires it to keep a tighter lid on inflation, which makes the call for quantitative easing harder, while the Federal Reserve has more wiggle room to spur the economy since it adheres to a dual mandate to control prices but also, to foster optimal job markets.
Meanwhile in Europe, indicators met market expectations though they still painted a picture of an economy battling major headwinds and in less need of more refined oil products.
The eurozone's consumer price index held steady at 2.4% in July, meeting expectations.
A separate report showed that the unemployment rate in the bloc rose to 11.2%, a new record high in July, also meeting expectations.
Germany’s unemployment rate remained steady at 6.8% in July, but Italy’s unemployment rate rose to 10.8% in June, the highest level since quarterly records started in 1999 and well above market calls for a 10.2% reading.
On the ICE Futures Exchange, Brent oil futures for September delivery were up 0.13% and trading at USD104.31 a barrel, up USD16.64 from its U.S. counterpart.
The European Central Bank is due to address policy on Thursday and talk it might unveil a rather guarded policy response to battle the debt crisis further sent oil falling.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD87.67 a barrel on Wednesday, down 0.44%, off from a session high of USD87.88 and up from an earlier session low of USD87.66.
Slumping economic growth rates, dismal monthly jobs reports and sluggish consumer spending figures may prompt the Fed to roll out a new round of bond purchases from banks, a monetary stimulus tool known as quantitative easing that weakens the dollar to spur recovery and hiring.
A suddenly weaker dollar makes oil a nicely priced commodity in the eyes of investors holding other currencies, which opens the door for an oil rally.
However, talk the Fed plans to intervene soon has been replaced with talk the Fed may wait until September to decide if the economy merits intervention, which sent oil falling.
Meanwhile, choppy U.S. data revealed an economy limping along its road to recovery and in less need of fuels and energy to grow.
The Chicago purchasing managers’ index rose to 53.7 in July from 52.9 in June, beating out expectations for a decline to 52.4.
In addition, the Conference Board said that its index of U.S. consumer confidence rose to 65.9 in July, from 62.7 in the preceding month, beating expectations for a 61.5 reading.
However, U.S. personal spending came in flat in June, matching May's 0.2% growth and in line with expectations, while personal incomes rose 0.5%, slightly beating out expectations for a 0.4% increase.
Across the Atlantic in Europe, ECB chief Mario Draghi has said he'll do anything to save the currency, though many investors remain wary if the bank will announce outright quantitative easing and opt instead for a round of sovereign bond purchases made with money already circulating in the European economy.
Quantitative easing in the U.S. sees the Fed expand its balance sheet to buy assets, often described as printing money out of thin air, and packs more of a punch.
The European Central Bank's mandate requires it to keep a tighter lid on inflation, which makes the call for quantitative easing harder, while the Federal Reserve has more wiggle room to spur the economy since it adheres to a dual mandate to control prices but also, to foster optimal job markets.
Meanwhile in Europe, indicators met market expectations though they still painted a picture of an economy battling major headwinds and in less need of more refined oil products.
The eurozone's consumer price index held steady at 2.4% in July, meeting expectations.
A separate report showed that the unemployment rate in the bloc rose to 11.2%, a new record high in July, also meeting expectations.
Germany’s unemployment rate remained steady at 6.8% in July, but Italy’s unemployment rate rose to 10.8% in June, the highest level since quarterly records started in 1999 and well above market calls for a 10.2% reading.
On the ICE Futures Exchange, Brent oil futures for September delivery were up 0.13% and trading at USD104.31 a barrel, up USD16.64 from its U.S. counterpart.