Crude Oil Ends Lower As Fed Meet Begins

(RTTNews) - U.S. crude oil ended lower Tuesday, as investors await the outcome of the U.S. Federal Reserve policy review meet that began earlier today, anticipating the a cut to the Fed's $85 billion monthly bond-buying program. With the Fed likely to begin tapering its quantitative easing program, speculations now center around the timing and quantum of cut.

Also in focus is the weekly U.S. oil inventory data, with analysts projecting supplies to show a substantial decline.

Light Sweet Crude Oil futures for January delivery, the most actively traded contract, dropped $0.26 or 0.3 percent to close at $97.22 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for January delivery scaled a high of $97.90 a barrel intraday and a low of $97.01.

Yesterday, oil gained nearly 1 percent even as investors awaited the outcome from the U.S. Federal Reserve policy review meet beginning Tuesday, anticipating a cut to its $85 billion monthly bond-buying program.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.03 on Tuesday, down from 80.11 late Monday in North American trade. The dollar scaled a high of 80.28 intraday and a low of 79.98.

The euro traded higher against the dollar at $1.3771 on Tuesday, as compared to its previous close of $1.3761 late Monday in North America. The euro scaled a high of $1.3782 intraday and a low of $1.3724.

In economic news from the U.S., the Labor Department said its consumer price index was unchanged in November after edging down by 0.1 percent in October. The flat reading for the index came in line with economist estimates. Meanwhile, the core consumer price index, which excludes food and energy prices, rose by 0.2 percent in November following a 0.1 percent uptick in the previous month. Economists had expected core prices to inch up by another 0.1 percent.

U.S. homebuilder confidence improved much more than anticipated in December, an encouraging sign for the housing market going into 2014, a report from the National Association of Home Builders showed Tuesday. The NAHB/Wells Fargo Housing Market Index climbed to 58 in December from 54 in November. Economists expected the index to edge up to 55. With the bigger than expected increase, the index reached its highest level since a matching reading in August, which represented a near eight-year high.

Elsewhere, eurozone inflation rose to 0.9 percent in November from 0.7 percent a month ago, Eurostat reported. The rate matched the flash estimate published on November 29. The statistical office revised core inflation down to 0.9 percent from 1 percent. The rate was slightly above October's 0.8 percent. Month-on-month, consumer prices slipped 0.1 percent in November.

Meanwhile, U.K. inflation slowed to 2.1 percent in November from 2.2 percent in October, the Office for National Statistics showed. The rate was forecast to remain at 2.2 percent in November. Inflation is now slightly above the 2 percent target.

Germany's economic confidence increased to the highest level in nearly seven years in December, and also to a larger extent than expected by economists, latest data showed. The ZEW indicator of Economic Sentiment climbed to 62 in December from 54.6 in November, results of a survey conducted by the Centre for European Economic Research/ZEW revealed. Economists expected a slower increase to 55.

Later today, the American Petroleum Institute is expected to release its U.S. crude oil inventories report for the week ended December 13.