Crude oil price is hovering dangerously over its four-month low price as futures rose 1 mere cent above the lowest close since June. With investors speculating that U.S. stockpiles have increased for a seven consecutive week, outlook does not appear to be improving for West Texas Intermediate, which has vacillated between gains and losses four the last four months.
With the U.S. economy, and the global one by consequence, on the rocks last month over the partial government shutdown and the Fed’s meeting tapering or extension of quantitative easing pumped into the nation’s economy, investors look forward to tomorrow’s release of supply data by the Energy Information Administration to assess demand levels in the world’s biggest consumer of oil.
Last week’s production reached a 24-year high while crude stockpiles expanded by 2.2 million barrels to 386.1 million. WTI for December delivery was at $94.50 a barrel in electronic trading on the New York Mercantile Exchange, down 12 cents, at 4:26 p.m. Singapore time. It closed at $94.61 on Nov. 1, the lowest since June 21. The volume of all futures traded was about 48 percent below the 100-day average.
Concerns that the U.S. government’s 16-day shutdown put a drag on economic growth and hampered oil demand has been keeping traders on their toes as they await the release of other key economic data later in the week that might shed more light on the Fed’s true stance towards its $85 million bond-buying programme after officials said they would proceed with the curtailing of the stimulus upon receiving more indicators of strengthened economy.
Third-quarter’s preliminary economic growth to be released on Thursday and the highly anticipated Non-Farm Payrolls report scheduled for Friday (delayed 7 days due to last month’s halt in government operations) will play an important role not only on investor sentiment, but also on the Fed’s decision regarding economic stimulus at its next meeting in December.
