By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures pared Tuesday losses to pull back above $74 a barrel, playing off better-than-expected economic data on the U.S. housing industry.
The Commerce Department estimated that the annualized pace of construction of new homes rose 10.5% in August to 598,000 units -- much stronger than the 535,000 pace that many observers had expected.
Crude for October delivery, the front-month contract expiring Tuesday, retreated 70 cents, or 0.9%, to $74.17 a barrel on the New York Mercantile Exchange. Prices were down by nearly $1 a barrel earlier.
The most-active November contract was off 11 cents, or 0.1%, to $76.10 a barrel.
On Monday, the October contract climbed about 1.6%.
Energy traders will key on the results of a U.S. central-bank meeting due out at 2:15 p.m. Eastern and later, on the American Petroleum Institute’s weekly update on oil reserves.
The Federal Reserve is conducting a one-day meeting, and financial markets are looking for any hints of a change in U.S. interest-rate policy. Moreover, there is speculation the central bank’s rate-setting panel could restart programs to purchase Treasury notes and mortgage bonds to boost the economy.
The API report comes ahead of the government’s more closely watched weekly data on Wednesday.
Analysts polled by Platts expect a decline of 1.5 million barrels for the week ended Sept. 17. Gasoline stocks are expected to be unchanged and reserves of distillates, which include diesel and heating oil, are seen increasing 100,000 barrels.
The analysts surveyed expect a drop in crude imports “to outpace an anticipated drop in refinery runs, leading to the crude stock draw,” Platts said in a press release late Monday.
Also Tuesday, reformulated gasoline for October delivery added less than a penny to $1.95 a gallon.
Natural-gas futures recovered from Monday’s rout, with the October contract rising 8 cents, or 2.2%, to $3.91 per million British thermal units.
Natural gas lost 5% on Monday, its biggest one-day drop since late April.
