By Virginia Harrison and Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Crude oil futures moved higher Tuesday in electronic trading, ahead of this week’s central bank meetings in the U.S. and Europe, and with weekly U.S. data on tap.
Crude for September delivery CLU2 +0.16% gained 49 cents, or 0.5%, to $90.27 a barrel on the New York Mercantile Exchange during European trading hours.
The U.S. Federal Reserve will begin a two-day policy meeting on Tuesday, while the European Central Bank and the Bank of England meet Thursday.
Capital Economics economist Julian Jessop said worsening U.S. economic data have boosted the likelihood the Fed will launch a third round of quantitative easing.
“Past rounds have lifted both equity and oil prices. However, a third injection of the same medicine is likely to be less effective, especially when demand for a safe haven from the crisis in Europe is keeping the dollar strong,” Jessop said.
Economists said the Fed is likely to hold off for now, likely opting to make a small move this week such as extending its pledge until mid-2015 to keep interest rates extraordinarily low. The Fed currently promises to hold rates low until the end of 2014. Read The Fed.
The ICE dollar index DXY -0.15% , which measures the greenback against six rival currencies fell to 82.819 from 82.829 in late North American trading on Monday.
Energy traders were also awaiting weekly U.S. supply data. The American Petroleum Institute delivers its report later Tuesday, followed by the more closely watched Energy Information Administration report on Wednesday.
Analysts polled by Platts forecast a 1.6 million barrel decline in crude oil stocks for the week ended 27 July.
Elsewhere in the energy complex, natural gas for September delivery NGU12 -0.53% rose 1.1% to $3.25 per million British thermal units, extending a 6.6% gain from Monday on unusually hot weather.
“Given that high temperatures are still forecast across wide areas of the U.S., the demand for gas to run air conditioning systems should remain high,” analysts at Commerzbank said in a note. “For this reason, U.S. natural gas stocks in the past 16 weeks have risen less sharply than on average over the past five years.”
Virginia Harrison is a MarketWatch reporter based in Sydney.
