WSJ:OIL FUTURES: Crude Eases Ahead Of Fed Meeting, U.S. Oil Data
By Cheang Chee Yew
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Crude-oil futures traded marginally lower in Asia Wednesday, with the market awaiting cues from the outcome of a two-day U.S. interest-rate-setting meeting and the release of U.S. oil inventory data.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at $86.74 a barrel at 0656 GMT, down $0.18 in the Globex electronic session. November Brent crude on London's ICE Futures exchange fell $0.01 to $110.53 a barrel.
"The oil market will focus on the equity market's reaction to the [Federal Open Market Committee] in today's trade as well as on the weekly oil inventory figures" due from the Department of Energy, MF Global analyst Tom Pawlicki said in a note to investors.
He tipped energy prices to trade mixed to lower in the near term.
Nymex futures may fall after the American Petroleum Institute--an industry trade association--Tuesday reported a rise of 2.57 million barrels in U.S. crude inventories last week, said Stephen Schork of The Schork Report. A Dow Jones Newswires poll of 15 analysts is forecasting a 900,000-barrel fall in crude stocks.
"We are certainly looking for a number closer to the API's than to analyst expectations," Schork said. He said that weakness below Tuesday's 23.6% retrace of $85.82 a barrel after the DOE "alerts to our $85.27 a barrel inflection low."
Gasoline inventories and stocks of distillate--comprising diesel fuel and heating oil--are both likely to increase by 1 million barrels, according to the analyst survey.
Pawlicki said he recommends selling the November Brent-Nymex spread at $24.50 a barrel on the risk of weakening Brent as Libyan supply gradually returns to the oil markets.
Further pressure on the spread--now around $23.64 a barrel--is likely when Nigeria resumes Bonny Light crude supply, possibly in November, Sydney-based Commodity Broking Services Managing Director Jonathan Barratt said, though he didn't provide a sell level.
Nymex reformulated gasoline blendstock for October--the benchmark gasoline contract--rose 46 points to $2.7060 a gallon, while October heating oil traded at $2.9611, 5 points lower.
ICE gasoil for October changed hands at $935.00 a metric ton, down $4.00 from Tuesday's settlement.
