WTI Oil prices dropped on Tuesday, before the release of the US crude inventories report. The spotlight has been on the Federal Reserve’s two-day meeting which will begin later in the day, as investors await news and hints as to when and whether the central bank would begin to scale backs its monthly stimulus program.
WTI crude oil for January delivery dropped close to 25 cents to $97.11 per barrel on the New York Mercantile Exchange, and stood at $97.36 at the time of writing. Brent crude for February settlement shredded as much as 0.2% to $109.15 a barrel on the ICE Futures Europe exchange. The European benchmark Brent crude was at a premium of $11.69 to WTI.
The US dollar index, which measures the strength the US dollar against six major currencies, edged 0.05% lower at 80.0370 points.
Federal Reserve Meeting
Members of the Federal Open Market Committee will meet for the final time this year for the Fed December meeting scheduled to begin later during the day till Wednesday. The meeting will reveal clues as to when and whether the central bank would begin to taper its monthly asset-purchasing program.
Analysts are expecting tapering to begin following the meeting, due to the improved labour market and the string of positive data which shows the health of the US economy is improving. While some analysts are predicting the central bank will maintain its stimulus till next year to get more evidence that the US economy’s recovery is stable.
US Inventories
The US crude stockpiles report from the Energy Information Administration (EIA) is expected to be released on Wednesday, with forecasts of drop of four million barrels of commercial crude inventories in the week ending December 13. Distillate stockpiles, including heating oil and diesel are expected to show a rise by 240,000 barrels in the last week, analysts predicts a rise of 1.75 million barrels in gasoline inventories in the week ended December 13.
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