IV:NYMEX crude oil eases in Asian trade as Fed meeting awaited
Investing.com - Crude oil prices eased slightly in Asia on Friday in thin trade with the focus on whether the Federal Reserve will soon taper stimulus tools.
On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD97.41 a barrel, down 0.10%, after hitting an overnight session low of USD97.32 and a high of USD98.17.
The commodity shrugged off U.S. House approval Thursday of a two-year budget agreement drafted by House Budget Committee Chairman Paul Ryan and Senate Budget Committee Chairman Patty Murray and Senate Majority Leader Harry Reid indicated at a Thursday briefing that he expects the Senate to approve the package next week.
The Ryan-Murray budget agreement sets overall discretionary spending for the current fiscal year at $1.012 trillion - about halfway between the Senate budget level of $1.058 trillion and the House budget level of $967 billion, and will come into effect after a current stop-gap bill ends on Jan. 15.
On Thursday, the Commerce Department reported earlier that U.S. retail sales rose 0.7% in November, beating market expectations for a 0.6% increase. Core retail sales, which are stripped of automobiles, rose 0.4%, above forecasts for a 0.2% increase.
The data kept expectations alive that the Federal Reserve will soon decide to taper its USD85 billion in monthly bond purchases, possibly at Dec. 17-18 policy meeting.
Fed bond purchases aim to spur recovery by driving down interest rates, weakening the dollar while they remain in place, though talk of their dismantling strengthens the greenback.
A stronger greenback makes oil a less attractive commodity on dollar-denominated exchanges.
Bearish supply data released on Wednesday watered down oil's gains as well.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 10.59 million barrels in the week ended Dec. 6, well beyond expectations for a decline of 2.95 million barrels, due in part to a drop in imports.
Total U.S. crude oil inventories stood at 375.2 million barrels as of last week.
ICE Futures Exchange Brent crude fell slightly more than a dollar Thursday to USD108.67 a barrel, a three-week low. Brent is under pressure from expectations that Libya soon will resume crude oil exports at near full capacity.
