West Texas Intermediate crude pared earlier gains to trade little changed after posting the biggest drop in seven months yesterday. Prices are headed for the first weekly decline since May.
Energy and other commodities sank yesterday after the U.S. Federal Reserve signaled it will scale back economic stimulus. China’s central bank injected funds to alleviate the worst cash crunch in at least a decade.
“The oil market, indeed most commodity markets, are trying to assess whether yesterday’s Fed-induced selloff was overdone,” Nic Brown, head of commodities research at Natixis in London, said in an e-mailed response to questions. “Some support is probably coming from the addition of liquidity in Chinese money markets overnight.”
WTI for August delivery was 3 cents lower at $95.11 a barrel in electronic trading on the New York Mercantile Exchange at 1:46 p.m. London time after earlier advancing as much as 70 cents. The volume of all futures traded was 5 percent above the 100-day average. The July contract expired yesterday after falling $2.84, or 2.9 percent, to $95.40, the biggest loss since Nov. 7.
Brent for August settlement was unchanged at $102.15 a barrel on the London-based ICE Futures Europe exchange. It dropped $3.97, or 3.7 percent, yesterday. The European benchmark grade ended the session yesterday at a premium of $7.01 to WTI, the narrowest since January 2011. The spread is at $7.04 today.
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