ND:Oil Futures Mixed; Inventory Data, Fed Meeting in Focus
By Eric Yep
Crude-oil futures were mixed in Asian trading hours Tuesday as markets await weekly data on U.S. oil inventories and the outcome of the Federal Reserve meeting later this week.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $97.99 a barrel at 0607 GMT, down $0.09 in the Globex electronic session. May Brent crude on London's ICE Futures exchange rose $0.30 to $ 106.54 a barrel.
Oil prices dropped sharply overnight as the Ukraine crisis eased temporarily after Western sanctions on Russia were limited to specific individuals and officials.
The situation could however escalate if Russia tries to encroach further into majority ethnic Russian territory in eastern Ukraine, prompting more severe economic sanctions.
"The key point for the oil markets is that, in sharp contrast to Iran, Europe and Russia have a gun to each other's head which should prevent either side from using the oil weapon and stopping oil trade flows," Michael Wittner, head of oil research at Societe Generale, said in a note.
"If Europe is heavily dependent on Russia, Russia is even more dependent on Europe," he explained.
U.S. weekly oil inventory data from the American Petroleum Institute are due later Tuesday, and the U.S. EIA data are due Wednesday. ANZ said the market expects a further 2.4 million barrel build in U.S. crude stocks and a draw in both gasoline and distillate stocks.
Financial markets will also be monitoring the U.S. Federal Reserve's two-day meeting that starts Tuesday, with Janet Yellen as the first female Fed chairperson. It is expected to make an announcement Wednesday and analysts say the Fed is likely to further reduce its asset purchases.
Meanwhile, another corporate debt default was reported in China--this time a property developer in a city in eastern China--raising concerns about the health of the country's finances.
Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--fell 18 points to $2.8793 a gallon, while April heating oil traded at $2.8995, 87 points higher.
ICE gasoil for April changed hands at $888.00 a metric ton, down $1.50 from Monday's settlement.
