FX:Crude oil edges lower with Middle East, U.S. supplies in focus
Forexpros - Crude oil futures edged lower during European morning hours on Wednesday, coming off the previous session’s one-week high amid ongoing concerns over the health of the global economy.
Losses were limited as investors focused on escalating tensions between Syria and Turkey and the possibility that Iran could support Syria in such a dispute.
On the New York Mercantile Exchange, light sweet crude futures for delivery in November traded at USD92.00 a barrel during European morning trade, shedding 0.45%.
Earlier in the day, prices fell by as much as 0.7% to hit a session low of USD91.71 a barrel.
New York-traded oil prices rallied more than 3% on Tuesday to hit a one-week high of USD92.88 a barrel after Turkey confirmed that it deployed additional F-16 fighter jets to an airbase close to the border with Syria.
Tensions between the two countries have been growing since Syrian shells last week killed five people in a Turkish border village.
Growing tensions between Iran and Israel also remain in focus. There are fears that an escalation of hostilities between Israel and Iran could set off a conflict across the region and send oil prices skyrocketing.
Countries in the Middle East and North Africa were responsible for 36% of global oil production and held 52% of proved reserves in 2011.
But prices retreated Wednesday as market sentiment remained under pressure after the International Monetary Fund cut its 2012 and 2013 global growth forecasts on Tuesday.
The IMF said that the world economy will grow 3.3% this year, the slowest since the 2009 recession, and 3.6% next year, compared with July predictions of 3.5% in 2012 and 3.9% in 2013.
Investors also remained cautious amid worries over how soon Spain may formally request a bailout and uncertainty over whether international creditors will extend loans to Greece.
Oil traders were awaiting fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Thursday’s government report could show crude stockpiles rose by 1.45 million barrels last week.
The data is released a day later than usual due to the Columbus Day Holiday in the U.S. on October 8.
The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for November delivery was little changed to trade at USD114.50 a barrel, with the spread between the Brent and crude contracts standing at USD22.50 a barrel.
London-traded Brent prices have been drawing support from a combination of lingering concerns over a disruption to supplies from the Middle East and worries over declining production in the North Sea-region.
