Oil futures fell below $113 a barrel on Thursday before a speech by the U.S. Federal Reserve chairman that may indicate the prospects for more economic stimulus, while investors looked to forthcoming data to shed light on the direction he could take. Investors will look for any hint of a third round of quantitative easing in a speech by Fed Chairman Ben Bernanke at a meeting of central bankers and economists in Jackson Hole, Wyoming on Friday.
Brent crude for October delivery was 6 cents down at $112.48 a barrel by 1450 GMT. U.S. crude fell for a second session, down $1.31 to $94.18.
“Things are quite balanced at the moment. The Jackson Hole meeting might be a reason for the consolidation right now,” said Eugen Weinberg, an oil analyst at Commerzbank in Frankfurt.
“There are expectations that there could be something announced but likely not. Though clarity would be good.”
Weekly jobless claims were unchanged in the latest week.
Figures like the Chicago Purchasing Managers Index (PMI) and factory orders due out on Friday could provide further hints at the health of the largest crude buyer’s economy, Weinberg added.
The U.S. economy fared slightly better than expected in the second quarter, but the pace of growth remained too slow to shut the door on further monetary easing. Gross domestic product expanded at a 1.7 percent annual rate.
Chances of more stimulus measures are increasingly viewed as slim, say several analysts.
Were Bernanke to announce a new round of stimulus, the act of printing more money would send oil too high. Demand would be destroyed and the act would negate any positive effects a much talked of stocks release would have, said Michael Hewson, analyst at CMC Markets.
Talks that consuming nations may release strategic oil reserves have capped oil prices.
The White House reiterated on Wednesday that the option of releasing oil from strategic reserves remained on the table…
Read more: Reuters