CP: Oil Futures Mixed Ahead of EIA Report, FOMC Meeting
By Huileng Tan
Crude-oil futures were mixed in a muted session on Monday ahead of the U.S. Energy Information Administration's weekly inventory report and the outcome of the Federal Open Market Committee meeting on Wednesday.
"There's a lack of strong driving factors from the Middle East or the U.S. after the government shutdown ended, so the oil market is back to focussing on fundamentals cues, which are likely to come from the EIA on Wednesday," said Singapore-based Phillip Futures analyst, Tan Chee Tat.
Mr. Tan said West Texas Intermediate crude oil prices are likely to test the $100 a barrel level by the second week of November as the seasonal maintenance of U.S. refineries come to an end. High stockpiles, which have weighed on prices recently, are likely to fall as production picks up, he added.
"We've seen an unusual widening in the Brent-WTI spread recently but the spread is likely to stay under $10 (down from $11 earlier last week) going forward," he said.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $97.61 a barrel at 0606 GMT, down $0.24 in the Globex electronic session. December Brent crude on London's ICE Futures exchange rose $0.24 to $107.17 a barrel.
The gains in Brent crude, however, may not be sustained, as prospects of increased production from Libya and Iraq will weigh, said Kaname Gokon, deputy general manager of research at Tokyo-based commodity brokerage Okato Shoji Co. who tipped Brent to test $106/bbl this week.
On the macroeconomic front, all eyes are on the FOMC meeting over Tuesday and Wednesday as investors focus on whether the outcome will be in line with expectations that tapering will be delayed till March 2014, said OCBC Bank in a note.
Nymex reformulated gasoline blendstock for November--the benchmark gasoline contract--was unchanged at to $2.5871 a gallon, while November heating oil traded at $2.9099, 2 points higher.
ICE gasoil for November changed hands at $914.75 a metric ton, up $5.00 from Friday's settlement.
