WSJ:Oil Futures Mixed; Libyan Supply, Fed Meeting in Focus
Crude-oil futures were mixed in Asian trade Monday, with the European benchmark supported by reports indicating Libyan oil exports may not materialize this week, while U.S. oil markets await the outcome of the Federal Reserve meeting later this week.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at $96.39 a barrel at 0550 GMT, down $0.21 in the Globex electronic session. January Brent crude on London's ICE Futures exchange rose $0.40 to $109.23 a barrel.
Last week, Libyan government officials said an agreement had been reached with tribal leaders to resume oil exports from the country's ports in the east, weighing on oil prices.
However, one of the militia leaders responsible for shutting several ports since July said Sunday that his group wouldn't reopen them because his demands for greater regional autonomy hadn't been met, The Wall Street Journal reported.
"Supply-side issues are likely to keep a floor under prices and temporarily allow OPEC not to have to face a difficult decision on how to allocate a possible cut," Barclays BARC.LN +0.50% said in its weekly energy outlook, referring to oil supply disruptions in Libya and Iran.
Western sanctions against Iran have cut off more than a million barrels a day of crude from global markets, while recent strikes and political unrest have reduced Libyan oil output to 200,000-300,000 barrels a day from 1.35 million barrels a day in the first half of the year, according to analysts.
Preliminary Chinese factory data Monday showed slower growth in manufacturing activity in the world's second-largest economy, capping Brent's gains.
Euro-zone manufacturing data as well as German and U.S. industrial production data are due later Monday. For the rest of the week, markets will focus on the outcome of the U.S. Federal Open Market Committee's meeting regarding when it will start to unwind its bond-buying program.
"We think that the decision will be a very close call. On balance, we think that the Fed will decide not to reduce the pace of its asset purchases [in December]," ABN Amro said in a note.
Nymex reformulated gasoline blendstock for January—the benchmark gasoline contract—rose 64 points to $2.6357 a gallon, while January heating oil traded at $2.9848, 91 points higher.
ICE gasoil for January changed hands at $923.00 a metric ton, up $5.25 from Friday's settlement.
