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Crude oil rebounds from 11-month low as market focus on Fed

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Forexpros - Crude oil futures erased sharp losses on Tuesday, rebounded from an 11-month low as the U.S. dollar came under pressure ahead of the release of a Federal Reserve statement on monetary policy, which could provide hints regarding further easing measures.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD81.78 a barrel during U.S. morning trade, climbing 1.1%.

It earlier fell as much as 5% to trade at USD75.72 a barrel, the lowest price since September 29, 2010.

Weakness in the U.S. dollar helped boost crude prices. The dollar weakened 0.55% against the euro to hit 1.4257, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.42% to trade at 74.64.

Meanwhile, investors awaited a Federal Reserve statement on monetary policy due later in the day, which could provide hints regarding further easing.

With financial markets in turmoil, expectations grew that the central bank would introduce further easing to calm investors and stimulate growth in the world's largest economy after it completed a USD600 billion Treasury bond-buying program known as Quantitative Easing 2 on June 30.

Markets were also looking forward to 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 stockpiles climbed by 1.5 million barrels last week, while gasoline stockpiles were projected to rise by 0.9 million barrels.

Crude prices plunged dramatically earlier as mounting fears over the global economic recovery weighed on future demand expectations, while an overall sense of risk aversion prompted investors to shun riskier assets.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery dipped 0.1% to trade at USD104.22 a barrel, up USD22.44 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.


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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