Forexpros – Crude oil futures traded in a tight range on Tuesday, hovering just above a two-week low as markets awaited the Federal Reserve’s rate decision later in the day and amid caution ahead of Wednesday’s OPEC meeting in Vienna.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at USD97.91 a barrel during European morning trade, edging 0.14% higher.
The January crude contract traded between a range of USD97.65, the daily low and USD98.23, the daily high.
Crude prices plunged nearly 2% on Monday, amid growing fears over the possibility of a mass downgrade of euro zone sovereign debt after last week’s economic summit failed to ease market jitters.
Euro zone developments have dominated trading in the oil market for the last several months, amid worries that the sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil.
The euro zone accounted for nearly 16% of global oil consumption in 2010, according to data from British Petroleum.
But prices found support ahead of the Federal Reserve’s rate decision later in the day. The Fed was not expected to take any policy action, although further easing steps are seen as likely next year.
Oil traders were also looking ahead to Wednesday’s OPEC meeting in Vienna, where the group’s members are scheduled to meet to review production quotas. The group has not changed output targets since January 2009.
Iranian oil minister Rostam Ghasemi, who is also OPEC’s president, said earlier that some OPEC members should reduce output to accommodate the return of shipments from Libya and gains in Iraqi supply.
Separately, Kuwait’s oil minister Mohammad al-Busairy said there is no need to change OPEC’s output or production quotas because “the market is stable.”
The contradicting comments underscored the division between OPEC members, which supply nearly 33% of the world’s crude.
The group failed to reach an agreement on quotas for the first time in at least 20 years at its June 8 meeting when a Saudi Arabia-backed proposal to boost output to make up for lost Libyan supply was rebuffed by Iran, Venezuela and four other countries.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery added 0.3% to trade at USD107.42 a barrel, with the spread between the Brent and crude contracts standing at USD9.51 a barrel.
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