IV:NYMEX December crude recovers in Asia after 5-month low overnight
Investing.com - Oil prices gained in Asia on Wednesday, recovering from weakness overnight on ample supplies seen in the United States and chances diplomatic talks will end Iran's nuclear standoff and allow the country to exit sanctions that have crippled oil exports.
Trade sanctions slapped on Iran due to its alleged nuclear ambitions have taken out more than 1 million barrels per day of oil from the global market.
On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD93.18 a barrel, up 0.15%, largely on a technical bounce. NYMEX crude settled $2.10 lower at $93.04 a barrel on Tuesday in New York, a five-month low.
U.S. Treasury Secretary Jack Lew is in Asia for a series of leadership meeting in Singapore and Malaysia on Wednesday and Beijing later in the week with investors looking for any comments on the recent strength of the dollar.
In Geneva over the weekend, talks among the U.S., Russia, China, Britain, Germany, France and Iran failed to result in an agreement over ways to dismantle Tehran's nuclear program, though hopes all sides will eventually agree on a game plan to end the standoff sent oil prices falling on Tuesday.
Also pressuring prices lower was an International Energy Agency report that the U.S. will surpass Russia and Saudi Arabia as the world’s top oil producer by 2015.
More bearish pressures came from sentiments that the Federal Reserve may begin tapering its USD85 billion-a-month asset purchase program as soon as next month due to improving jobs and economic growth reports.
The Fed’s stimulus program boosts commodities prices by weakening the greenback, thus making raw materials such as oil more attractive on dollar-denominated exchanges.
Separately, oil traders looked ahead to the release of industry and official reports on U.S. stockpiles of crude and refined products to gauge demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report on Wednesday, while the U.S. government will publish its weekly report on Thursday, a day later than usual due to the Veterans Day holiday on Monday.
