BANGKOK – Oil extended losses Wednesday on expectations U.S. crude stockpiles rose again last week because of muted demand. Financial markets also awaited the outcome of the U.S. Federal Reserve’s policy meeting.
Benchmark U.S. crude for December delivery was down 51 cents at US$97.69 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract dropped 48 cents to $98.20 on Tuesday and is down about 4 per cent in October.
Energy Department data due Wednesday for the week ended Oct. 25 is expected to show increases of 3.5 million barrels in crude oil stocks and 1.5 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
U.S. crude supplies rose 21.5 million barrels in the four weeks ended Oct. 18, to levels nearly 10 per cent above the five-year average.
“Bad economy means bad oil prices. There’s not much more to understanding the way oil moves outside of that in America,” said Carl Larry of Oil Outlooks and Opinions.
The market is also waiting for Wednesday’s outcome of a two-day Federal Reserve policy meeting. The Fed is expected to reinforce expectations that it won’t begin reducing its mammoth monetary stimulus until next year.
Brent crude, a benchmark for international crude also used by U.S. refineries, was down 21 cents to $108.80 on the ICE exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline fell 0.1 cent to $2.59 a gallon.
— Heating oil shed 0.3 cent to $2.96 a gallon.
— Natural gas rose 1 cent to $3.639 per 1,000 cubic feet.
(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)