Crude oil prices ended near flat in a sluggish day of trading on Tuesday as stronger equity markets put a floor under prices and Brent’s premium over U.S. crude slid below $6.Some trading was attributed to squaring positions as traders bought contracts to cover short bets made the previous session, when prices dropped to a three-week low, said Gene McGillian, analyst with Tradition Energy in Stamford, Connecticut.
Oil prices bounced slightly off a three-day rout last week that followed news that the U.S. Federal Reserve would scale back its quantitative easing program. The Fed news boosted the dollar, making commodities priced in the greenback more expensive for holders of other currencies.Equity markets were higher after strong economic data on U.S. durable goods orders and prices for existing single-family homes.
But the data did little to guide a rally in the oil market and acted more as a “double-edged sword”, McGillian said.”It means the Fed will pare back stimulus quicker than people think and people are waiting to see what the market will look like once the Fed takes its foot off the accelerator.”
Front-month U.S. crude oil futures finished the day 14 cents higher at $95.32 per barrel. U.S. crude is down nearly $4 from a $99.01 high made last Wednesday.