Crude oil futures edged lower on Wednesday, as traders positioned themselves ahead of the outcome of the Federal Reserve’s monetary policy meeting later in the day and a government report on U.S. crude supplies.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at USD86.36 a barrel during European morning trade, retreating 0.64%.
It earlier fell as much as 0.75% to trade at a daily low of USD86.28 a barrel.
The Fed’s Open Market Committee was to conclude its two-day policy meeting later in the day, amid speculation that the central bank could introduce fresh stimulus measures to boost U.S. economic growth.
Many market participants expect the Fed to opt for a move known as ‘Operation Twist’, a combination of buying and selling of shorter and longer term Treasury bonds in order the bend the yield curve.
Oil traders were also awaiting 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 data was expected to show that U.S. crude oil stockpiles fell by 1.5 million barrels, while gasoline supplies were forecast to rise by 1.35 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 2.57 million barrels, while total gasoline supplies rose by 0.62 million barrels, painting a mixed picture of U.S. energy demand.
Concerns over the outlook for global growth also weighed on crude prices. The International Monetary Fund on Tuesday downgraded its global growth outlook for 2012 to 4% from a previous estimate of 4.3%, saying that the world economy has entered a "dangerous new phase".
The IMF revised down its forecast for U.S. economic growth to 1.5% for the rest of 2011 and 1.8% in 2012, down from its June estimate of 2.5% and 2.7% respectively.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for November delivery added 0.3% to trade at USD110.58 a barrel, up USD24.22 a barrel on its U.S. counterpart.
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