Crude oil futures fluctuate with Bernanke in focus

Investing.com - Crude oil futures fluctuated between small gains and losses on Thursday, as markets digested Wednesday’s remarks on monetary policy by Federal Reserve Chairman Ben Bernanke.

On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD106.09 a barrel during European morning trade, down 0.2% on the day.

New York-traded oil prices held in a range between USD106.46 a barrel, the daily high and a session low of USD105.99 a barrel.

In day one of his semi-annual testimony before the Financial Services Committee in Congress on Wednesday, Bernanke said the central bank expects to start tapering bond purchases by the end of the year, but added that there was no “preset course.”

Bernanke said the bank’s bond purchase program could be tapered at a faster pace, slower pace or even temporarily increased depending on economic and financial developments.

The Fed Chairman said the economic recovery was continuing at a moderate pace but reiterated that monetary policy will remain accommodative for the foreseeable future.

Bernanke will testify before the Senate Banking Committee on Thursday.

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.

Oil prices were boosted on Wednesday after a report from the U.S. government showed that oil supplies fell significantly more-than-expected last week.

The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 6.9 million barrels last week, compared to expectations for a decline of 2 million barrels.

The U.S. was to release the weekly government report on initial jobless claims and data on the Philly Fed manufacturing index later in the trading day.

The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery shed 0.2% to trade at USD108.39 a barrel, with the spread between the Brent and crude contracts standing at USD2.30 a barrel.

The gap between the contracts narrowed to the smallest level since November 2010 last week, amid an improving production outlook in the North Sea and indications of declining stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures.