Oil prices slip as investors eye Fed

20th August 2013, Comments 0 comments

World oil prices declined on Tuesday in cautious deals on the eve of minutes from the US Federal Reserve, dealers said.

Brent North Sea crude for delivery in October shed 49 cents at $109.41 a barrel in London midday deals.

New York's main contract, West Texas Intermediate for September fell 74 cents to $106.36 per barrel.

Traders were exercising caution ahead of minutes of the July meeting of the US central bank's policy-setting Federal Open Market Committee (FOMC).

The minutes are expected to provide clues as to the scale and timing of the withdrawal of the Fed's vast stimulus measures, which are more commonly referred to as quantitative easing (QE).

"Market activity remains relatively quiet as participants wait for the release of July's FOMC minutes tomorrow which will give further clarity on the withdrawal of QE," said analyst Kash Kamal at London-based brokerage Sucden Financial.

"As a result of the bearish mood, crude prices have slipped in early morning trade sparked by nervous investors taking profit."

Crude futures had fallen on Monday, retreating from Friday's one-month highs, as concerns about the vital Suez shipping corridor eased somewhat even as sporadic violence continued in Egypt.

Despite the modest losses, Kamal added that prices remained supported by concerns that the Egyptian unrest could spread across the Middle East and block oil supplies.

"Prices are still well supported at key levels owing to the unrest in Egypt and Libya which is threatening to disrupt crucial logistical bottlenecks and could potentially spill over into neighbouring countries," he added.

The oil market was also awaiting Wednesday's weekly crude stockpiles data for clues about demand in the world's biggest economy.

The US Energy Information Administration had said last week that crude stockpiles shrank to 360.5 million barrels in the week to August 9, the lowest since January.

A decline in stockpiles tends to support crude prices as it suggests a pick-up in demand.

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© 2013 AFP

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