Crude dips on soft U.S. producer price data, Fed uncertainty supports
Published Aug 14, 2013 12:28PM ET
Uncertainty over when the Federal Reserve will begin scaling back stimulus measures curbed losses.
Stimulus programs weaken the greenback to spur recovery as long as they stay in effect, which makes oil an attractive buy in dollar-denominated exchanges.
On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD106.24 a barrel during U.S. trading, down 0.55%.
The September contract settled up 0.68% at USD106.83 a barrel on Monday.
In the U.S. earlier, the Department of Labor reported that the country's producer price index came in flat last month, missing expectations for a 0.3% increase after a 0.8% increase in June.
The core producer price index eased up 0.1% in July, missing forecasts for a 0.2% increase, which sparked concerns that the U.S. economy still faces headwinds that will cut into demand for fuels and energy.
Losses were limited, as the numbers dampened expectations that U.S. recovery is strong enough for the Federal Reserve to begin tapering its USD85 billion-a-month asset-purchasing program in the near future, which has pushed up oil prices by keeping the dollar weak.
Supply data supported prices as well.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 2.8 million barrels in the week ended August 9, surpassing expectations for a decline of 1.5 million barrels.
Total U.S. crude oil inventories stood at 360.5 million barrels as of last week.
The report also showed that total motor gasoline inventories decreased by 1.2 million barrels, beating expectations for a decline of 822,000 barrels.
Meanwhile on the ICE Futures Exchange, Brent oil futures for September delivery were down 0.10% at USD108.38 a barrel, up USD2.14 from its U.S. counterpart.
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Written By: Investing.com
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