Brent Climbs As Markets Wait for Falling US Inventories' Confirmation
Brent crude oil traded steadily on Tuesday morning as expectations of a drop in US crude inventories kept markets positive as investors hoped for increasing demand growth in the number one oil consuming nation. The commodity traded at $108.80 at 5:53 GMT on Tuesday morning.
If the inventory estimates are confirmed, crude prices could see a massive boost. However some see the dollar's rising strength capping gains from dropping inventories. Later on Tuesday, the American Petroleum Institute will release a stockpile report and the US Energy Information Administration will follow with their report on Wednesday.
Soft US retail sales data reminded markets that the US hasn't fully recovered and provided further support to the Federal Reserve's decision to maintain its stimulus program for the time being. Federal Reserve Chairman Ben Bernanke is set to speak to Congress on Wednesday, where many are expecting him to reconfirm the Fed's plan to maintain its $85 billion per month bond buying plan. The ongoing political turmoil in Egypt has shifted out of focus for the moment, but will likely continue to support Brent prices and could resurface if the situation worsens. The regime change has created a divide among Egyptian people as the supporters and opponents of ousted president Mohamed Morsi clash in protests.
According to Reuters, police fired tear gas at protesters in Cairo who are demanding Morsi's reinstatement. The nation's interim president has been working to quickly fill cabinet seats and organize new elections as soon as possible to help stabilize the nation.
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