Brent crude edged lower under $110 per barrel on Wednesday, supported by a weak dollar as disappointing United States jobs data raised hopes the US Federal Reserve would stick to its economic stimulus this year, www.upstreamonline,com reported.
Any delay in cutting back on the Fed’s bond buying programme could stoke demand in the world’s largest oil consumer. US crude was also knocked back by a build in stocks that widened the gap between the two major oil contracts.
The onset of seasonal US refinery maintenance, coupled with pipeline outages, has swollen domestic stockpiles and stretched the Brent-WTI oil spread to its widest since April, Reuters reported.
Brent crude oil futures slipped 15 cents to $109.82 per barrel by Wednesday morning, after earlier hitting a session-high of $110.06.
US crude oil futures for December delivery slipped 38 cents to $97.92. The November futures, the previous front-month contract, which expired on Tuesday hit a low of $97.50, its weakest since 1 July.
The Brent/WTI spread was holding close to $12, its biggest gap since mid-April.
“WTI prices are largely dictated by the amount of supply in the US at the moment, which is why WTI really underperformed Brent overnight,” Reuters quoted OptionsXpress market analyst Ben Le Brun as saying in Sydney.
Traders are going to be looking now for further economic data to indicate what the Fed might do about its stimulus programme, he said.
“Markets have priced in a tapering story maybe pushed out into 2014 … So now, we’re probably looking for economic data coming out in the next 24 hours to dictate prices.”
Data from the American Petroleum Institute showing crude stocks building at Cushing, Oklahoma, after 14 weeks of decline helped to trigger selling of US crude.
Investors are waiting for the latest weekly report from the US Energy Information Administration, which will return to its normal schedule this week after the US government resumed operations following its shutdown.
US crude prices were also under pressure with a rise in output from major shale oil plays, according to an EIA report.
Brent found support earlier in the session from the belated release of US jobs data showing nonfarm payrolls increased by 148,000 workers in September, less than expected. While the employment gain in August was revised up, the July figure was revised down to be the weakest since June 2012.
source-punch
