Forexpros – Crude oil futures trimmed losses on Tuesday, coming off the lowest levels of the day as market players awaited the release of minutes from the Federal Reserve’s March policy-setting meeting amid ongoing concerns over the health of the global economy.
On the New York Mercantile Exchange, light sweet crude futures for delivery in May traded at USD105.06 a barrel during U.S. morning trade, easing down 0.18%.
It earlier fell by as much as 1.1% to trade at a session low USD104.14 a barrel.
Crude’s prices dropped to their lowest levels of the day after the Commerce Department said U.S. factory orders rose by 1.3% in February, below expectations for a 1.5% gain.
Factory orders in January fell by 1.1%. The figure was revised from a previously repotted decline of 1.0%.
But prices were off the session lows as investors positioned themselves ahead of the release of Fed’s most recent policy meeting. Oil traders will pay close attention for any hints the central bank could introduce further stimulus measures in the near-term to boost U.S. economic growth.
Oil prices were lower during the European session amid concerns over the outlook for growth in the region after official data released earlier confirmed that the euro zone’s economy contracted by 0.3% in the final three months of 2011.
Data on Monday showed that manufacturing activity in the euro zone remained in contraction territory for the eighth successive month in March, while a separate report showed that the bloc’s unemployment rate ticked up to a record high of 10.8% in February.
Meanwhile, oil traders were awaiting 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 2.1 million barrels last week to the highest level since August, underscoring fears over a slowdown in oil demand from the U.S.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Markets continued to monitor tensions between Iran and the West and a potential disruption to oil supplies from the region.
Iranian Foreign Minister Ali Akbar Salehi warned that the Islamic Republic will not surrender to international pressure as tightening sanctions restrict the country’s trade in the run-up to the talks over its nuclear program.
Iran and six world powers will meet in Turkey on April 13 and 14 for a round of talks over Tehran’s disputed nuclear program, U.S. Secretary of State Hillary Clinton said on Monday.
The Obama administration said Friday that world oil supplies were sufficient to proceed with sanctions on banks in countries that import Iranian oil.
The stand-off between Iran and Western countries has dominated sentiment in the oil market in recent months.
There are fears that the escalating rift over Tehran’s nuclear program could lead to an oil-export halt, a disruption to shipping traffic in the Strait of Hormuz or military conflict, which could send oil prices skyrocketing.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery added 0.22% to trade at 125.70 a barrel, with the spread between the Brent and crude contracts standing at USD20.64, the widest since October.
Brent prices remained supported amid prospects of tighter crude supplies from the North Sea region, as well as supply disruption fears in South Sudan and a reported halt of Iraqi oil exports from the Kurdistan region.
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