IV:Crude oil eases off 4-month high amid concerns over U.S. economy
Investing.com - Crude oil futures were lower during European morning hours on Thursday, as investors were hesitant to extend a recent rally that took prices to a four-month high on Wednesday amid concerns over the U.S. economy.
Losses were limited after the Federal Reserve said it would maintain its easing program at the outcome of its latest policy meeting.
On the New York Mercantile Exchange, light sweet crude futures for delivery in March traded at USD97.67 a barrel during European morning trade, down 0.3% on the day.
New York-traded oil prices fell by as much as 0.4% earlier in the session to hit a daily low of USD97.61 a barrel. Oil futures hit USD98.24 a barrel on Wednesday, the strongest level since September 17.
In a statement released after a two-day policy meeting on Wednesday, the Fed said that the economy had "paused in recent months".
The central bank added that it will continue its USD85 billion a month quantitative easing program “if the outlook for the labor market does not improve substantially.”
The Fed also reiterated that it will continue to hold interest rates close to zero until the unemployment rate falls below 6.5%.
The statement came after data showed that the U.S. economy contracted 0.1% in the fourth quarter, confounding expectations for growth of 1.1% and a sharp slowdown from growth of 3.1% in the preceding quarter.
With the Fed meeting behind them, oil traders will now turn their attention to Friday's nonfarm employment report.
Oil traders have been paying close attention to readings on U.S. employment levels because it offers insight into the economic health of the world's largest crude oil consumer.
Also, China will release its official manufacturing data for January on Friday, providing investors with another chance to see whether the recovery in the world’s second largest economy remains on track.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery dipped 0.3% to trade at USD114.58 a barrel, with the spread between the Brent and crude contracts standing at USD16.91 a barrel.
