By William L. Watts, MarketWatch
NEW YORK (MarketWatch) — Oil futures traded slightly higher Monday, flitting between small gains and losses, as traders await a meeting of Federal Reserve policy makers and October jobs data later this week for clues to when the central bank will begin to scale back stimulus.
Nymex WTI crude for December delivery CLZ3 +0.06% was up 3 cents, or less than 0.1%, at $97.88 a barrel. ICE Brent crude UK:LCOZ3 +1.25% gained ground, adding $1.39 to trade at $108.32 a barrel.
Oil futures were briefly lifted by data that showed U.S. industrial production rose a slightly stronger-than-expected 0.6% in September, while capacity utilization rose to 78.3% from 77.9%, marking its highest level since July 2008.
Oil futures ended Friday in positive territory, but saw the December Nymex crude contract lose more than 3% for the week on concerns about rising U.S. crude supplies and downbeat economic data. Some analysts see room for further near-term consolidation.
“We argue that seasonal factors speak in favor of more stabilization and note that the overvaluation has been reduced significantly following the recent correction,” wrote strategists at Credit Suisse.
Others see further downside, citing additional supply concerns as traders eye talks over Iran’s nuclear program between Tehran and western powers.
“New Iranian President Hasan Rouhani’s ‘charm offensive’ at the United Nations last month, coupled with a historic phone call with U.S. President Barack Obama, revived market hopes that Iranian barrels could return with a vengeance if the diplomatic mood music translates into a breakthrough in the standoff over Tehran’s disputed nuclear program,” said Phil Flynn, analyst at Price Futures Group in Chicago.
Iran’s crude exports have more than halved since sanctions against Tehran were tightened in mid-2012, he noted.
Meanwhile, the Fed is expected to repeat that it is prepared to be patient and await more evidence the economy is strong enough to withstand a reduction in monetary stimulus when policy makers conclude a two-day meeting on Wednesday.
In other energy markets, November gasoline future RBX3 +1.49% rose nearly 4 cents a gallon, or 1.4%, to $2.624. November natural-gas futures NGX13 -3.05% fell 12.7 cents to $3.58 per million British thermal units.
William L. Watts is MarketWatch's senior markets writer, based in New York. Follow him on Twitter @wlwatts.
