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Crude oil cuts losses after U.S. industrial production data

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Forexpros - Crude oil futures pared earlier losses on Tuesday, easing off the daily low following better-than-expected data on U.S. industrial production and after ratings agency Fitch affirmed the U.S. AAA sovereign debt rating.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at USD86.88 a barrel during U.S. morning trade, dropping 0.92%.

It earlier fell as much as 2.05% to trade at a daily low of USD85.87 a barrel.

The U.S. Federal Reserve said earlier that industrial production rose by a seasonally adjusted 0.9% in July, above expectations for a 0.5% increase.

The previous month's figure was revised up to a 0.4% gain from a previously reported 0.2% increase.

Meanwhile, ratings agency Fitch reaffirmed the U.S. AAA credit rating and said the outlook was 'stable', reflecting the country's "pivotal role in the global finance system".

The ratings agency said that it expected the U.S. economic recovery to regain momentum in the second half of the year.

Meanwhile, markets 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 declined by 0.7 million barrels last week, while gasoline stockpiles were projected to fall by 2.0 million barrels.

Crude prices were pressured earlier as risk aversion sharpened after weaker-than-expected growth data out of Germany and the wider euro zone added to fears over global growth prospects and weighed on future oil-demand expectations.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery dropped 1.02% to trade at USD108.72 a barrel, up USD21.84 on its U.S. counterpart.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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