IV:Crude oil futures edge lower as dollar strengthens
Investing.com - Crude oil futures edged lower on Tuesday, as a broadly stronger U.S. dollar and ongoing uncertainty over the duration of the Federal Reserve’s stimulus program weighed.
On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD94.65 a barrel during European morning trade, down 0.5%.
New York-traded oil futures traded in a range between USD94.52 a barrel, the daily low and a session high of USD95.10 a barrel.
The December contract rose to USD95.38 a barrel on Monday, the highest since November 6, before settling at USD95.14, up 0.57%.
Oil futures were likely to find support at USD93.68 a barrel, the low from November 6 and resistance at USD96.64 a barrel, the high from November 1.
Demand for the dollar continued to be underpinned amid speculation the Fed will begin tapering its asset purchase program at its December policy meeting.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.35% to trade at 81.45.
Dollar-denominated oil futures contracts tend to falls when the dollar rises, as this makes oil more expensive for buyers in other currencies.
The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.
Market players looked ahead to the outcome of a four-day meeting of China’s top Communist Party officials later in the day, amid expectations that the country’s new government will unveil economic reforms.
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 December delivery shed 0.35% to trade at USD106.02 a barrel, with the spread between the Brent and crude contracts standing at USD11.37 a barrel.
London-traded Brent prices rallied 1.2% on Monday after talks between Iran and six global powers in Geneva ended without a resolution that would ease sanctions against Tehran’s oil exports in exchange for concessions on its nuclear work.
Trade sanctions slapped on Iran due to its alleged nuclear ambitions have taken out more than one million barrels per day of oil from the global market.
