| Brent slips to $93 on EU debt woes, ample supplies |
NEW YORK Crude oil futures fell on Wednesday, with Brent dropping to a fresh 17-month low, as euro zone worries festered and US crude inventory data showed a surprise stock build.
Demand worries persisted as ample supplies amid slowing growth in the economies of China and the US continued to stymie buying of riskier assets such as oil futures.
Investors across markets also remained cautious ahead of the conclusion of a two-day policy meeting of the US Federal Reserve, even though it is widely expected to decide on more monetary easing to help the faltering US economic recovery. The Fed is scheduled to make an announcement of its decision at 12:30 p.m. EDT and Fed Chairman Ben Bernanke will hold a press conference later, at 2:15 pm EDT.
“The Fed might provide some short term support but there is a fundamental oversupply of light/sweet crude oil in the Atlantic Basin that neither Opec nor the Fed can resolve,” said Olivier Jakob, at Petromatrix in Zug Switzerland.
US crude oil stockpiles rose last week by 2.86 million barrels, defying forecasts for a stock drawdown.
Prices were also pressured as US inventories of distillates and gasoline rose higher than expected, data from the US Energy Information Administration also showed.
In London, Brent crude for August delivery was down $2.05 at $93.71 by 11:55 a.m. EDT. It earlier slid to a session low of $93.38, the lowest for front-month Brent since January 7, 2011.
US July crude, which is expiring at the close, was down $2.13 at $81.90, the session low. The more actively traded August crude was down $2.20 at $82.15.
“It must be because investors are looking ahead and seeing that the situation in Europe isn’t going to get any better, while the outlook for demand in the US is poor and China is slowing too,” said David Morrison, analyst at GFT Global.
A report by the industry group American Petroleum Institute on Tuesday said US crude stocks inventories fell 550,000 barrels last week, with crude imports down 82,000 barrels per day.
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