FX:Crude oil little changed near 4-month low as markets eye Sandy
Forexpros - Crude oil futures were little changed near the previous session’s fourth-month low during European morning hours on Tuesday, as refineries along the U.S. East Coast scaled back operations in response to the threat of Hurricane Sandy.
On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD85.62 a barrel during European morning trade, easing up 0.1%.
New York-traded oil prices held in a tight range of USD85.83 a barrel, the session high and a daily low of USD85.14 a barrel. On Monday, futures fell to USD84.70 a barrel, the weakest level since July 12.
NYMEX floor trading will remain closed for a second day Tuesday, according to exchange operator CME Group, while electronic trading of energy and other NYMEX products will be unaffected.
Trading activity was expected to remain thin on Tuesday, as investors continued to monitor the trajectory of Hurricane Sandy, as it barrels along the U.S. East Coast.
Hurricane Sandy made landfall in Southern New Jersey late Monday, causing major damage along the U.S. Northeast.
The storm, the largest in the Atlantic on record, has since been downgraded to a post-tropical cyclone by the U.S. National Hurricane Center.
Six refineries in the region curbed production because of Sandy, accounting for 1.22 million barrels of the area’s crude-processing capacity of 1.29 million barrels a day, raising concerns over a slowdown in near-term demand.
The American Petroleum Institute will “re-evaluate” the release of its weekly oil inventory report, originally scheduled for release later Tuesday.
The U.S. Energy Information Administration said it will postpone the release of its weekly report on oil stockpiles from Wednesday due to storm-related delays.
The data may be published November 1, the Energy Department’s statistical unit in Washington said in an e-mailed statement.
The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.
Elsewhere, in the euro zone, sentiment firmed up after official data showed that the Spanish economy contracted by 0.3% in the third quarter, compared to expectations for a 0.4% contraction.
The data came a day after Spanish Prime Minister Mariano Rajoy said that he would request a bailout "when I think it is in the interests of Spain".
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.
Investors remained jittery amid concerns over former Italian Prime Minister Silvio Berlusconi's threat to bring down the current government. Rome was planning to auction as much as EUR7 billion of government bonds later in the day.
New York-traded oil prices have been under heavy selling pressure in recent sessions, as increasing concerns over the outlook for global economic growth and the impact on future oil demand prospects dampened the appeal of the commodity.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery eased down 0.05% to trade at USD109.39 a barrel, with the spread between the Brent and crude contracts standing at USD23.77 a barrel.
London-traded Brent prices have outperformed New York crude in recent sessions, as a combination of lingering concerns over a disruption to supplies from the Middle East and worries over declining production in the North Sea-region have been supporting Brent prices.
