Crude oil lower with Fed meeting, U.S. supply data in focus

Investing.com - Crude oil futures were lower on Tuesday, as disappointing U.S. economic data fuelled concerns over weaker demand in the world's largest oil consumer.

On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD98.36 a barrel during U.S. morning trade, down 0.35%.

New York-traded oil futures traded in a range between USD97.87 a barrel, the daily low and a session high of USD98.62 a barrel. The December contract ended 0.85% higher on Monday to settle at USD98.68 a barrel.

Oil futures were likely to find support at USD95.95 a barrel, the low from October 24 and resistance at USD100.29 a barrel, the high from October 22.

The Conference Board said its index of consumer confidence dropped to 71.2 in October from an upwardly revised reading of 80.2 in September, as concerns over the U.S. government shutdown and the debt ceiling crisis weighed.

Analysts had expected the index to fall to 75.0 this month.

The data came on the heels of a report showing that U.S. retail sales fell 0.1% in September, compared to expectations for a 0.1% increase. Core retail sales, which exclude automobile sales, edged up 0.4% last month, in line with expectations.

A separate report showed that U.S. producer price inflation ticked down 0.1% in September, missing forecasts for a 0.2% increase. Core inflation edged up 0.1%; in line with expectations.

The data cemented expectations that the Federal Reserve will maintain its stimulus program well into the first quarter of next year, in order to safeguard the faltering economic recovery.

The central bank is scheduled to start its two-day policy-meeting later Tuesday, with market analysts expecting the central bank to keep its USD85 billion-a-month asset purchase program on track.

Oil traders also looked ahead to the release of fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.

The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 3.3 million barrels.

Crude oil inventories in the U.S. rose by 5.2 million barrels last week to hit 379.8 million, the highest level since June 28.

U.S. crude prices have been on a downward trend in recent weeks amid concerns the recent U.S. government shutdown created a drag on economic growth and eroded demand in the world’s largest oil consumer.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery dipped 0.55% to trade at USD109.02 a barrel, with the spread between the Brent and crude contracts standing at USD10.66 a barrel.