Crude oil futures little changed near 4-month high

Investing.com - Crude oil futures were little changed during European morning hours on Tuesday, with the market still lacking any clear direction after last week's rally that took prices to the highest level since mid-September.

Focus remained on the U.S. economic outlook and how U.S. lawmakers will deal with the upcoming debt ceiling debate.

On the New York Mercantile Exchange, light sweet crude futures for delivery in February traded at USD93.12 a barrel during European morning trade, down 0.1% on the day.

New York-traded oil prices traded in between a tight range of USD93.00 a barrel, the daily low and a session high of USD93.33 a barrel. Oil futures touched USD93.82 a barrel on January 2, the strongest level since September 19.

New York-traded oil futures climbed 2.5% last week, the fourth consecutive weekly gain and the biggest advance in nearly three months.

Oil futures rallied last week after U.S. lawmakers passed a last-minute bill to avoid the fiscal cliff, a series of looming tax increases and spending cuts that could have pushed the U.S. economy into a recession.

Focus was expected to remain on the U.S. economy, as investors remained jittery over the longer term fiscal outlook, with negotiations on raising the U.S. debt ceiling still to come in February.

Oil traders are also taking a wait-and-see approach ahead of a policy meeting by the European Central Bank on Thursday to see if the central bank will modify its benchmark interest rate.

German Chancellor Angela Merkel and Greek Prime Minister Antonis Samaris are to meet in Berlin later in the day to review Greece's progress in tackling its deficit.

The meeting comes ahead of a summit of Eurogroup of finance ministers on January 21, when a decision on whether to release the next tranche of bailout loans for the debt-strapped country will be made.

Market players are also looking ahead to a flurry of Chinese economic data scheduled to come out later in the week. The world’s largest second largest oil consumer will release monthly trade data on Thursday, while inflation figures are due on Friday.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery fell 0.15% to trade at USD111.24 a barrel, with the spread between the Brent and crude contracts standing at USD18.12 a barrel.

The spread between the two contracts narrowed to the lowest since September, as the start of an expansion of the Seaway pipeline was expected to help alleviate a glut of crude in the Midwest.

Pipeline operators Enterprise Products Partners and Enbridge said the flow to the Gulf from the oil-transit hub at Cushing, Oklahoma, the delivery point for the NYMEX oil contract, will grow to 400,000 barrels a day from current levels of 150,000 barrels a day by the end of the week.