IV:Crude oil futures lower as Middle East tensions ease
Investing.com - Crude oil futures slipped lower during early European trading hours on Friday, as easing tensions in the Middle East weighed on prices, while market participants continued to monitor U.S. budget discussions.
On the New York Mercantile Exchange, light sweet crude futures for delivery in November traded at USD102.60 a barrel during European morning trade, down 0.42%.
The November contract settled up 0.36% at USD102.03 a barrel on Thursday.
Oil futures were likely to find support at USD102.20 a barrel, Thursday's low and resistance at USD103.95 a barrel, the high from September 25.
Oil prices weakened amid lower supply concerns from the Middle East after the U.S. and Russia agreed on a draft U.N. Security Council resolution aimed at eliminating chemical weapons in Syria.
Although Syria is not a major oil producer, any escalation of tensions in the Middle East could disrupt flows from a region that supplies nearly a third of the world's oil.
In addition, the U.S. and Iran began talks on Thursday to resolve their ongoing standoff over Tehran's nuclear program.
Meanwhile, U.S. budget concerns persisted after Republican leaders in the U.S. House of Representatives refused on Thursday to give in to President Barack Obama's demand for straightforward bills to run the government beyond September 30 and to increase borrowing authority to avoid a default.
Separately, uncertainty over the future of the Federal Reserve's stimulus program also dominated markets after a recent string of U.S. economic reports underlined concerns over the outlook for the nation's economic recovery.
On Thursday, official data showed that the U.S. economy expanded by 2.5% in the second quarter, confounding expectations for a 2.6% expansion.
Last week, the Fed said it wanted to see more evidence of a sustained economic recovery before it reduced stimulus.
The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for November delivery fell 0.34% to trade at USD108.84 a barrel, with the spread between the Brent and crude contracts standing at USD6.24 a barrel.
