LONDON--Crude oil futures were trading broadly flat-to-lower Tuesday, as wider economic concerns continued to dominate the oil market.
But after 11 sessions of both benchmark contracts trading in relatively tight ranges, some market watchers said there are signs that prices could be ready for a push higher.
At 1035 GMT, the front-month January Brent contract on London's ICE futures exchange is down 28 cents at $110.64 a barrel.
The front-month January light, sweet crude contract on the New York Mercantile Exchange is trading 5 cents higher at $ 89.14 a barrel.
Mixed macroeconomic data and ongoing concerns over U.S. debt reduction plans kept market participants on edge, with few fundamental developments, said VTB Capital analyst Andrey Kryuchenkov in a note to clients.
Positive signs of revived growth in China were offset by poor U.S. manufacturing data, which fell to a three-year low.
The oil market's moves around these data releases are a sign of how it is closely wedded to the wider macroeconomic picture. At a time when levels of supply are running high any drop off in demand--particularly in the U.S., the world's leading oil-consuming economy, and China, from where the bulk of oil demand growth comes--would have ramifications for the oil price.
A portion of Middle East risk premium remains in the oil price, said Dominick A. Chirichella at the Energy Management Institute, but in the short term the price of oil will move based more on the market's view of the global economy, the U.S. "fiscal cliff" negotiations and less so on the geopolitics.
"This is still an event driven market for oil at the moment," said Mr. Chirichella, in a note.
But risks to supply, the weaker U.S. dollar and the prospect of the bond purchasing volume being topped up at next week's Federal Reserve meeting should limit the price slide, said Commerzbank analysts in a note to clients. They expect the price weakness to be only temporary in nature.
Monday's Commitment of Traders report from the Intercontinental Exchange seems to back that up--the number of speculative longs in the market increased to a six-week high with open interest at a near-two-year high. Analysts at PVM support this view, noting that the ICE data shows net speculative length as much closer to the lowest level of the last 18 months than to the highest, indicating more room to the upside than the downside.
The ICE's gasoil contract for December delivery is down $4.75 at $945.00 a metric ton, while Nymex gasoline for January delivery is down 50 points at 2.7215 cents a gallon.
Write to Ben Winkley at ben.winkley@dowjones.com
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