DTN Oil Update
Oil Futures Nearly Stead, Waiting for November CPI Data
HOUSTON (DTN) -- Crude oil futures showed few changes Tuesday morning as the market seeks direction from U.S. inflation data while monitoring tensions in the Middle East that are driven by the fall of Syria's Bashar al-Assad government and reports of airstrikes led by Israel in Syrian territory.
Israel denied a ground incursion in Syria, days after a rebel group linked to Al-Qaeda took control of Damascus, stating that its military activities in that region are focused on destroying weapons of the Syrian military that could pose a threat to its security. Turkey, Egypt and Qatar condemned Israel's deployment into the buffer zone with Syria, according to a Wall Street Journal report.
In addition to the uncertainty regime change in Syria could bring to the already troubled Middle East, Saudi Arabia's the decision of to cut its official selling price (OSP) of its crude flagship crude for January shipments to Asia and other regions contributed to a bearish tone on oil prices.
Saudi Aramco set its January OSP of Arab Light shipments to Asia at plus $0.90 barrel (bbl),â?¯ hitting low multi-year record levels, on expectations poor buying interest from China will continue.
The Saudi Arabian producer slashed its January OSPs, despite the Chinese government unexpectedly announcing this weekend a stimulus plan which included a shift in its monetary policy, for the first time in over a decade.
Oil futures showed little change Tuesday morning as market participants remained in a wait-and-see situation as the Bureau of Labor Statistics is scheduled to release November's Consumer Price Index on Wednesday.
The CPI for November is anticipated to increase 2.7% year-on-year, compared to 2.6% recorded in October, according to a recent survey of economists conducted by the Wall Street Journal.
However, lower inflation could influence the Federal Reserve's decision to marginally cut interest rates in 2025 to as low as 3% from the current range of 4.5% to 4.75%. The market will know about the decision on Dec. 18, when the Federal Open Market Committee meets.
Near 9:21 a.m. EST, January NYMEX contract crude was up $0.13 to $68.50 bbl, while February ICE Brent rose $0.05 to $72.19 bbl.â?¯January RBOB futures rose by $0.0007 at $1.9595 gallon and January ULSD futures rose $0.0061 to $2.1896 gallon.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
