Brent Slips As End to Fed Stimulus Nears

Brent crude oil started the week on its back foot on Monday as the commodity slid below $108 on speculation about when the US Federal Reserve will begin tapering its stimulus spending. Brent traded at $107.73 at 7:57 GMT on Monday morning. This week investors are heavily anticipating a slew of US data which will help determine whether or not the Fed is planning to pull back its stimulus spending in September. US regional manufacturing surveys, retail sales, consumer prices, housing starts, and industrial production reports are all due out later this week. According to

, most are counting on the Fed reducing its $85 billion per month stimulus plan in September and this week's data will likely confirm that sentiment. A pullback on Fed stimulus money would remove much of the liquidity that has kept commodities afloat and bring Brent prices down.

An increase in supply has also pressured Brent prices as data showed that Saudi Arabian production increased in July. Also, supply disruptions in Libya eased as protests in the African nation died down and production from the largest oil terminal resumed. Despite that, worries remained that tension in the Middle East and Africa could cause supply interruptions in the future as ongoing conflict in both Egypt and Syria pose a threat to the region. Recent Chinese data cushioned prices a bit after the nation's trade data posted higher than expected figures. The numbers gave investors hope that the number two oil consuming nation was headed for recovery after releasing weak economic data for the better part of two years.