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Crude oil futures edge higher ahead of U.S. oil data, Fed minutes

Published 11/20/2013, 03:56 AM
Updated 11/20/2013, 03:56 AM
Investing.com - Crude oil futures inched higher on Wednesday, as traders looked ahead to 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.

On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD94.19 a barrel during European morning trade, up 0.3%.

New York-traded oil futures traded in a range between USD93.85 a barrel, the daily low and a session high of USD94.29 a barrel.

The January contract settled 0.22% higher on Tuesday to end at USD93.89 a barrel.

Oil futures were likely to find support at USD92.51 a barrel, the low from November 14 and resistance at USD94.94 a barrel, the high from November 18.

Wednesday’s government report was expected to show that crude oil stockpiles rose by 900,000 barrels last week, while gasoline inventories were forecast to fall by 260,000 barrels.

After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 510,000 barrels in the week ended November 15, while gasoline stockpiles increased 80,000 barrels.

U.S. crude prices have been on a downward trend in recent weeks amid concerns the U.S. government shutdown created a drag on economic growth and eroded demand in the world’s largest oil consumer.

Total U.S. crude oil inventories stood at 385.4 million barrels as of last week, the highest since June.

Investors are also awaiting the release of the minutes of the Federal Reserve’s October meeting later in the day for further indications on the future course of U.S. monetary policy.

Fed Chairman Ben Bernanke reiterated the central bank’s commitment to its highly accommodative monetary policy in comments made at the annual National Economists Club members dinner in Washington on Tuesday.

Bernanke said the Fed is likely to keep interest rates near zero until "perhaps well after" unemployment drops below 6.5%, the bank's threshold for increasing rates.

Bernanke added that a “preponderance of data” would be needed to begin removing accommodation.

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 January delivery inched up 0.15% to trade at USD107.07 a barrel, with the spread between the Brent and crude contracts standing at USD12.88 a barrel.

Oil traders focused on a resumption of talks between Iran and major powers in Geneva on Wednesday.

Talks aimed at curbing Iran’s nuclear program and relaxing sanctions against the oil producer stalled earlier in the month. Trade sanctions slapped on Iran due to its alleged nuclear ambitions have taken out more than one million barrels per day of oil from the global market.

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