WSJ:OIL FUTURES:Crude Flat To Lower; Market In Holding Pattern
--Oil slightly weaker as investors maintain holding pattern ahead of DOEs, Bernanke speech
--Oil market also keeping a watchful eye on euro/dollar rates
--Market feels pressure from negative macro data, but propped up by Libya uncertainty, QE3 potential
By Selina Williams
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Crude oil futures were unchanged to slightly lower Wednesday as investors maintained a holding pattern ahead of a key weekly report on U.S. oil inventories and U.S. Federal Reserve Chairman Ben Bernanke's speech at Jackson Hole on Friday.
At 1104 GMT, the front-month October contract on the New York Mercantile Exchange was trading down 94 cents, or 0.1%, at $85.35 a barrel. The front-month October Brent contract on London's ICE futures exchange was down 26 cents, or 0.2%, at $109.05 a barrel.
"Now people are just taking a breather, while perhaps also keeping an eye on the euro/dollar rate," said Glen Ward, head of retail derivatives at London Capital Group.
Oil prices typically weaken as the U.S. currency firms as the dollar-priced commodity becomes more expensive for holders of other currencies.
Overall though, the market is under pressure from another slew of negative macro-economic data coming out of Europe and the U.S. this week and the potential for a return of Libyan crude oil supplies to the market.
But until Libyan leader Moammar Gadhafi is finally found and toppled, it will remain unclear when the North African country's oil output and exports will be resumed.
And the bearish macro economic data, in some investors' minds, only reinforces a belief that it could well force the U.S.'s Bernanke to announce another round of quantitative easing in his Friday speech.
"The macro-economic data continues to deteriorate but three days before Jackson Hole this is considered to be positive as it increases the faith that Bernanke will hint at a third round of quantitative easing," Petromatrix said in a research note.
As for later Wednesday, market participants are waiting to see if the U.S. Department of Energy's weekly report, due at 1430 GMT, confirms the American Petroleum Institute's surprise build in gasoline stocks and a surprise draw in crude.
If they do, the huge gasoline build could be quite bearish for prices, as it indicates a counter-seasonal drop in oil demand.
Some investors could use that drop in oil prices as a buying opportunity to lock in a long position on expectations that prices would rise on Friday's speech, Ward added.
Analysts estimate crude inventories last week rose 1.3 million barrels, according to a survey by Dow Jones Newswires. Gasoline stockpiles are seen falling 900,000 barrels, while inventories of distillates are seen climbing 700,000 barrels.
At 1105 GMT, the ICE's gasoil contract for September delivery was up $3, or 0.3%, at $933.75 per metric ton, while Nymex gasoline for September delivery was down 201 points, or 0.7%, at $2.8565 per gallon.
