WSJ:OIL FUTURES:Crude Oil Lower As Euro Zone GDP Data Disappoints
--Crude lower as European equities, euro slump on disappointing euro zone GDP data
--Investors await outcome of Merkel, Sarkozy meeting
--Oil market volatility dropping, prices trying to consolidate around current levels
By Selina Williams
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Crude oil futures were lower Tuesday as European equities markets slumped and the euro fell against the dollar following weaker-than-expected data on German gross domestic product and euro zone economic growth.
But volumes were thin as the oil market awaited the outcome of a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy, due to commence at 1400 GMT, to discuss the euro zone debt crisis.
At 1037 GMT, the front-month September contract on the New York Mercantile Exchange was trading down 85 cents, or 1%, at $87.03 a barrel. The front-month September Brent contract on London's ICE futures exchange was down 87 cents, or 0.8%, at $109.04 a barrel ahead of the contract's expiry later Tuesday.
October Brent was down $1.08, or 1%, at $107.78 a barrel.
Investors in the oil market could be feeling some relief from the turbulence of the past two weeks as volatility is dropping and the market tries to consolidate around current levels.
According Andrey Kryuchenkov, VTB Capital vice president of commodities research, the historical intraday reading on Nymex's front month contract has dropped below the monthly average of around 43% for the first time since Aug. 4.
"The oil market could get choppy with the Merkel, Sarkozy meeting, but overall it's trying to consolidate--it's run out of steam and longs liquidation is finished for now," he said.
After the front month September Brent expiry later Tuesday, the October contract is seen consolidating in a range of $106.60 to $110 a barrel.
Nymex front month crude is trying to consolidate in a range of $84 to $88 a barrel, Kryuchenkov added.
Data on U.S. oil stockpiles in two separate reports due out later Tuesday and Wednesday will be key for indicating whether the trend of improving demand in the world's largest oil consumer is holding, analysts said.
Crude stockpiles are expected to drop by 400,000 barrels, according to the mean of six analysts' forecasts gathered by Dow Jones Newswires. Gasoline stocks are expected to fall by 1.3 million barrels and distillates, which include diesel fuel and heating oil, are expected to rise by 700,000 barrels.
Other important U.S. indicators due later Tuesday include July housing starts at 1530 GMT and July industrial production at 1615 GMT.
At 1039 GMT, the ICE's gasoil contract for September delivery was down $2.00 at $920.25 per metric ton, while Nymex gasoline for September delivery was down 228 points, at $2.8517 per gallon.
