FX:Crude oil little changed near 1-week low with ECB, fiscal cliff in focus
Forexpros - Crude oil futures were little changed during European morning hours on Thursday, holding near the previous session’s one-week low as investors looked forward to a policy decision by the European Central Bank, while uncertain U.S. fiscal deficit negotiations also kept investors on the edge.
On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD87.91 a barrel during European morning trade, little changed on the day.
New York-traded oil prices traded in a tight range between USD87.94 a barrel, the daily high and a session low of USD87.59 a barrel.
Oil futures fell to a one-week low of USD87.49 a barrel on Wednesday, after a U.S. government report showed gasoline inventories increased by 7.9 million barrels last week, the largest weekly gain since September 2001.
The larger-than-expected build in fuel supplies suggested demand in the world’s largest oil consumer could be weakening.
Investors continued to monitor developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the four weeks left before the deadline.
President Barack Obama reassured markets Wednesday, saying that if Republicans accept tax hikes on wealthier Americans, a deal could be pushed through in "about a week."
President Obama said recently that any solution must include spending cuts and raising revenue, including increasing taxes on the wealthiest. Republican leaders say they will agree to higher revenue, but they want to close loopholes or reduce tax breaks rather than raise rates.
Oil traders are also looking ahead to Friday’s key U.S. nonfarm payrolls data for November, as investors attempt to gauge the strength of the U.S. economy.
Meanwhile, in the euro zone, the ECB was widely expected to keep rates unchanged at 0.75% later Thursday, while a post-policy meeting press conference by President Mario Draghi would be closely watched for indications on the future direction of monetary policy.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery eased up 0.1% to trade at USD108.86 a barrel, with the spread between the Brent and crude contracts standing at USD20.95 a barrel.
