YEREVAN, August 22. /ARKA/. Crude-oil futures fell after the minutes from the Federal Reserve's latest policy meeting heightened concerns that less economic stimulus could hit demand for the fuel.
Traders are worried that the end of the $85 billion-a-month bond-buying program will cause dollar-based crude prices to rise in local-currency terms, choking off economic growth in India, Indonesia and other emerging markets that has fueled a rise in global oil consumption in recent years.
Anxiety over the Fed minutes, released 30 minutes before the close of trading, outweighed even a positive U.S. oil-inventory report.
The weekly report showed refiner demand for crude last week was the highest at this time of year since 2004. That strong demand pulled crude-oil stocks down by a bigger-than-expected 1.4 million barrels.
"I thought the [Energy Information Administration] numbers were good," said Andy Lebow, senior vice president of energy futures at Jefferies Bache LLC in New York, noting that the amount of crude oil in storage dropped to the lowest level in almost a year. But the impact of the data was overshadowed by concerns about the Fed's next move, he said.
Light, sweet crude for October delivery fell 1.2%, or $1.26, to $103.85 a barrel on the New York Mercantile Exchange. The third consecutive day of declines put oil at its lowest settlement since Aug. 8."The market made its move before the Fed," said Gene McGillian, a broker and analyst at Tradition Energy in Stamford, Conn. "There is still uncertainty about when [the Fed will] act."
The market has settled into a $103-to-$108 range for U.S. crude-oil futures and "it looks like we've got a lot of volatility ahead" until more clarity comes from the Fed, said Gene McGillian, a broker and analyst at Tradition Energy in Stamford, Conn.
The notes from the most recent Fed meeting showed officials were divided about the timing of the first reduction in bond purchases, with "a few" officials looking to move soon and "a few" urging more caution. Officials also appeared slightly more pessimistic about the U.S. economic outlook than they had earlier in the year. The minutes were released Wednesday after the customary three-week lag. –0--