MW: Crude futures fall sharply on heels of China import data
Traders await outcome of Fed meeting, EIA's monthly energy report
FRANKFURT (MarketWatch) -- Crude-oil futures fell below $81 a barrel Tuesday, as disappointing imports data reported by China weighed on sentiment ahead of the Federal Reserve's monetary-policy statement that will command the attention of financial markets.
Crude for September delivery dropped $1.39, or 1.7%, to $80.09 a barrel in electronic trade on the New York Mercantile Exchange.
The contract earlier hit an intraday low of $79.94 a barrel.
The dollar rose against other major currencies, thereby putting pressure on dollar-denominated commodities such as gold and oil.
The dollar index (DXY 81.35, +0.64, +0.79%) gained 0.6% to 81.164, while the British pound dropped 1% to $1.5733. The euro also fell, off 0.5% to $1.3154.
"Apart from a firmer U.S. dollar, the import data from China published during the night put a strain on the price," said Commerzbank analysts.
China's trade surplus for July soared to $28.7 billion, data showed, as imports rose 22.7% -- a bigger-than-expected slowdown in import growth.
"Worries regarding a lasting weakening of demand seem to be premature though," Commerzbank said, adding that the monthly report due to be published later Tuesday by the Energy Information Administration "should reveal that China will remain the supporting pillar of oil demand."
Also in Washington, the Federal Open Market Committee convenes its one-day meeting to review the U.S. economy and monetary policy, and will release its policy statement at 2:15 p.m. Eastern time. Investors are waiting to see if the Fed decides to take any extra measures to boost the economy following a round of disappointing data.
U.S. stock futures pointed to a lower opening on Wall Street, as European and Asian equities also posted losses.
After the close of Tuesday's regular trading in energy futures, the American Petroleum Institute will report updated data on petroleum inventories. Analysts polled by Platts expect a decline of 2.4 million barrels in U.S. commercial crude stocks for the week ended Aug. 6.
They also project a drop of 1.5 million barrels in gasoline stocks and an increase of 1.1 million barrels in distillate stocks. Refinery utilization, or the run rate, is expected to fall by 0.6 of a percentage point to 90.6%.
