Crude oil futures decline ahead of German ruling, U.S. supply data

Crude oil futures were mildly lower during European morning hours on Tuesday, as investors stuck to the sidelines ahead of a key German court ruling on whether the euro zone's permanent bailout fund is compatible with German law. On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD96.38 a barrel during European morning trade, dipping 0.15%. Prices were stuck in a narrow trading range of USD96.08 a barrel, the daily low and a session high of USD96.55 a barrel. Investors turned jittery ahead of a closely-watched German court ruling scheduled for Wednesday, on the constitutionality of the European Stability Mechanism. Germany’s approval will be necessary in order to implement the European Central Bank’s bond purchasing program announced last week, dubbed Outright Monetary Transactions. Meanwhile, markets continued to eye the outcome of the Fed’s policy meeting on Thursday, amid fresh speculation that the U.S. central bank may announce a third round of quantitative easing to boost growth. Market expectations of a QE3 announcement this week increased after last Friday’s weaker-than-expected jobs report. Past monetary stimulus rounds weakened the U.S. dollar, boosting the price of dollar-denominated commodities like oil. Oil traders were also anticipating 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 crude stockpiles fell by 2.1 million barrels. The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand. Elsewhere, on the ICE Futures Exchange, Brent oil futures for November delivery eased down 0.1% to trade at USD114.17 a barrel, with the spread between the Brent and crude contracts standing at USD17.79 a barrel.

Courtesy: ForexPros