Crude steady to lower as markets brace for Fed policy decision
Published Dec 17, 2013 01:12PM ET
Fed bond purchases aim to spur recovery by driving down interest rates, weakening the dollar while they remain in place.
A weaker greenback makes oil a more attractive commodity on dollar-denominated exchanges.
On the New York Mercantile Exchange, light sweet crude futures for delivery in February traded at USD97.60 a barrel during U.S. trading, down 0.18%.
The commodity hit a session low of USD97.27 and a high of USD98.15. The February contract settled up 0.87% at USD97.77 a barrel on Monday.
Oil futures were likely to find support at USD96.53 a barrel, Monday's low, and resistance at USD98.75 a barrel, the high from Dec. 10.
Many investors remained in standby mode ahead of the Fed's Wednesday announcement on monetary policy as well as the fate of stimulus programs such as monthly bond purchases, which have supported oil for over a year by softening the dollar.
Lackluster inflation data released earlier gave investors little indication as to whether the Fed will taper asset purchases now or in 2014.
The Department of Labor reported earlier that the U.S. consumer price index came in flat in November after falling 0.1% in October. Analysts were calling for a 0.1% uptick.
The annual rate of inflation rose 1.2% in November, just shy of expectations for 1.3% reading but still up from a four-year low of 1.0% in October.
U.S. core inflation, stripped of volatile food and energy items, rose 0.2% in November from October, beating expectations for a 0.1% gain, while the year-on-year rate for November rose 1.7%, which met consensus forecasts.
Investors were also awaiting the release of official oil and refined products inventories on Wednesday as well.
Meanwhile on the ICE Futures Exchange, Brent oil futures for February delivery were down 0.95% at USD108.38 a barrel, up USD10.78 from its U.S. counterpart.
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Written By: Investing.com
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