FX:Crude oil little changed on dimming demand prospects, Spain eyed
Forexpros - Crude oil futures were flat during European morning hours on Tuesday, as concerns about future oil demand prospects continued to weigh on prices.
Futures drew support from rising geopolitical tensions in the Middle East, amid fears over a disruption to supplies from the region.
On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD92.05 a barrel during European morning trade, easing down 0.3%.
The December contract was stuck in a tight trading range of USD92.64 a barrel, the daily high and a session low of USD91.97 a barrel.
Investors continued to hope that Spain will formally request a bailout in the coming weeks and activate a bond buying program by the European Central Bank.
The Wall Street Journal and Financial Times each cited an unnamed Spanish official in separate reports Monday as saying Madrid is ready to request a credit line from the ECB.
Market players have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the ECB to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.
European Union policymakers will hold a two-day summit in Brussels starting on Thursday to discuss ways to firewall and extinguish the debt crisis as well as Greece's steps towards fiscal recovery.
Oil traders looked ahead to Chinese third quarter growth figures due out on Thursday to gauge whether the world second largest economy is heading towards a hard or a soft landing.
Market analysts expect the data to show China's annual growth slowed for a seventh straight quarter in the July-September period to the weakest level since the depths of the 2009 global financial crisis.
Official data released Monday showed that Chinese consumer prices rose 1.9% in September from the year-ago period, in line with expectations and down from 2.0% in August, while producer price inflation fell 3.6%, also in line with expectations.
The data came after a report over the weekend showed that Chinese exports grew 9.9% on the year in September, above expectations for a 5.5% gain and increasing from 2.7% in August. Imports rose 2.4% from a year earlier, in line with expectations.
The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
But prices remained supported as investors focused on escalating tensions between Syria and Turkey and the possibility that Iran could support Syria in such a dispute.
Tensions between Turkey and Syria 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.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery eased down 0.3% to trade at USD114.03 a barrel, with the spread between the Brent and crude contracts standing at USD21.97 a barrel.
London-traded Brent prices have been well-supported in recent sessions, as a combination of lingering concerns over a disruption to supplies from the Middle East and worries over declining production in the North Sea-region have been boosting prices.
