WTI Near Five-Month Low as Stimulus Outlook Counters Supply Drop

West Texas Intermediate oil was little changed near the lowest level in more than five months amid speculation that the U.S. will taper economic stimulus countered a projection of falling crude supplies.

Futures swung between gains and losses in New York after declining 0.9 percent yesterday, the most in almost a week. The Federal Reserve Bank of New York President William C. Dudley pointed to payrolls growth as a positive sign for the economy, raising the prospect the central bank will scale back bond purchases. An Energy Information Administration report tomorrow will probably show crude stockpiles declined for the first time in nine weeks, according to a Bloomberg News survey of analysts.

WTI for December delivery was at $93 a barrel in electronic trading on the New York Mercantile Exchange, down 3 cents, at 11:23 a.m. Sydney time. The contract decreased 81 cents to $93.03 yesterday to the lowest level since May 31. The volume of all futures traded was about 84 percent below the 100-day average. Prices are up 1.3 percent this year.

Brent for January settlement declined 3 cents to $108.47 a barrel on the London-based ICE Futures Europe exchange yesterday. The front-month European benchmark crude ended the session at a premium of $14.79 to WTI futures, the widest spread based on closing prices since March 21.

The policy-setting Federal Open Market Committee is buying $85 billion of bonds every month to spur growth and has said it plans to slow the purchases when the economy improves.

(Source: Bloomberg)