TOP: Oil falls to near $82 before US crude supply data
Oil prices slipped to near $82 a barrel Tuesday as traders looked to the latest U.S. crude supply reports for clues about the strength of consumer demand for fuel.
By early afternoon in Europe, benchmark oil for December delivery was down 23 cents to $82.29 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 83 cents to settle at $82.52 on Monday.
Crude inventories likely rose 1.5 million barrels last week, according to analysts surveyed by Platts, the energy information arm of McGraw–Hill Cos. The American Petroleum Institute plans to announce its inventory numbers later Tuesday while the Energy Department's Energy Information Administration reports its weekly supply data — the market benchmark — Wednesday.
"While the numbers could bring some surprises this week, one week's report will not change a continued bearish supply–usage situation as large supply surpluses will remain intact," Ritterbusch and Associates said in a report.
Crude will likely hover above $80 until the Federal Reserve details possible measures to spur economic growth, known as quantitative easing, at its meeting Nov. 2 and 3.
"Energy futures could continue to chop sideways through the rest of this week as both the bulls and the bears are apt to exercise caution ahead of next week's Fed meeting," Ritterbusch said.
Slight gains by the euro and the British pound on the dollar kept a floor under oil prices by making crude priced in dollars cheaper for investors holding other currencies.
"It seems that the U.S. dollar continues to be strongly correlated with the oil market, as the recent U.S. dollar weakness has helped oil prices to remain fairly strong above $80 per barrel area, amid these fragile economic conditions," said analysts at Sucden Financial in London.
In other Nymex trading in November contracts, heating oil fell 0.26 cent to $2.2715 a gallon and gasoline dropped 0.66 cent to $2.0607 a gallon. Natural gas gained 0.4 cent to $3.321 per 1,000 cubic feet.
In London, Brent crude fell 4 cents to $83.50 a barrel on the ICE Futures exchange.
