LONDON: Brent crude oil slipped toward $106 a barrel yesterday after hitting a four-month low the previous session, while US crude futures fell on expectations of rising inventories in the world’s top oil consumer.
Brent crude was down 20 cents at $106.03 a barrel at 1450 GMT after hitting a four-month low of $105.13 overnight. US oil was down 54 cents at $94.09, slumping to a fresh four-month low.
Rising US oil stocks kept prices under pressure in recent weeks and are expected to show a new weekly increase of around 1.8 million barrels, according to a Reuters poll ahead of reports from industry group the American Petroleum Institute and the Energy Information Administration. Stocks at Cushing, Oklahoma rose by more than 2m barrels in the week ending October 25.
“Even with sporadic disruptions in Iraq and Libya, the supply side looks good. The uncertainty at the moment is what will happen with demand. Although the global economy is set to pick up next year, we will not see the same oil demand growth we saw a few years ago,” Global Insight analyst Simon Wardell said.
Investors are looking for important data from the US later this week, including gross domestic product and employment, to offer a clearer view of the outlook for demand in the world’s biggest oil consumer. The data could also give clues on when the Federal Reserve may start to roll back its monetary stimulus, which would reduce the supply of dollars and make dollar-denominated assets such as oil more expensive for holders of other currencies.
Comments by top Fed officials overnight showed that a cut-back in the stimulus was not imminent.
“We will be looking at the data for signs on when the tapering will come. People are thinking it will be pushed back and back,” Wardell said. Renewed tensions in Libya and Egypt offered some support to prices. Heavy shooting erupted early yesterday in Tripoli, the latest unrest in the Opec producer that highlights the government’s inability to control militia groups. Reuters
