Forexpros – Crude oil futures edged lower on Wednesday, easing off a three-month high as political uncertainty in Italy weighed on sentiment, while the prospect of a supply disruption from Iran helped limit losses.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at USD96.36 a barrel during European morning trade, shedding 0.46%.
It earlier fell by as much as 0.52% to trade at a daily low of USD96.30 a barrel. Crude prices rose to USD97.30 on Tuesday, the highest price since August 1.
Market sentiment was dampened amid uncertainty over whether Italy’s new government will be able to implement austerity measures, after Prime Minister Silvio Berlusconi said he would step down after parliament approves the budget for 2012 next week.
Berlusconi announced his resignation after a budget vote on Tuesday resulted in his loss of the parliamentary majority.
The U.S. dollar traded higher against the euro, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.38% to trade at 77.08.
Meanwhile, the International Atomic Energy Agency, in a report Tuesday said that Iran had acquired nuclear weapons capabilities and that “serious concerns” surrounded the nation’s ability to apply those capabilities militarily.
Investors had been closely watching the report as moves by Iran to gear its nuclear capabilities to the military could prompt the United Nations to impose new sanctions on Iran, including oil exports.
Iran is the world’s fourth largest crude oil producer and the second biggest exporter among OPEC members. The country produces approximately 3.7 million barrels of oil a day.
Also supporting prices, official data released earlier showed that China’s consumer price index eased for the third consecutive month in October, slowing to 5.5% from 6.1% in September, fuelling speculation that Beijing could loosen monetary policy in the near-term.
China is the world’s second largest consumer after the U.S. and has been the engine of strengthening demand.
Oil traders were awaiting weekly government data on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The report was expected to show that U.S. crude oil stockpiles rose by 0.5 million barrels last week, while gasoline supplies were forecast to fall by 0.4 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 0.15 million barrels last week, while total gasoline supplies fell by 1.5 million barrels.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery eased down 0.05% to trade at USD114.95 a barrel, with the spread between the Brent and crude contracts standing at USD17.65 a barrel.
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