Brent Slides As Worries About Fed Tapering Take Center Stage

As the release of US Federal Reserve meeting minutes neared, Brent crude oil prices slipped while investors worried about the bank cutting back on its stimulus spending as early as September. On Tuesday, just a day ahead of the minutes' release, Brent crude oil slipped and traded at $108.87 at 7:39 GMT. The US Federal Reserve is due to release its latest policy meeting minutes on Wednesday, which investors will scour for clues about the bank's decision to taper its $85 billion per month bond buying plan. Most believe the tapering will begin in just a few weeks, which would lend strength to the dollar but in turn send Brent prices tumbling. Investors are also anticipating Chinese flash PMI numbers which are due out on Thursday. After receiving mixed signals from the world's second largest oil consuming nation, investors are hoping this week's PMI data will provide further insight into China's economy and paint a better picture of demand growth. Supply concerns have kept a floor under Brent prices recently as trouble in Africa and the Middle East has tightened supply.

reported that Libya had to suspend some of its oil export contracts with force majeure on Monday due to the ongoing protests that have shut down several Libyan export terminals. Currently, Libya is only operating at about half of its normal exporting capacity; the nation's lowest level since a civil war in 2011. Ongoing conflict in Egypt has also supported prices as, although the nation itself doesn't produce oil, the unrest could disrupt shipments through the Suez Canal, where much of the world's oil passes. On Tuesday, it was announced that Egyptian forces had arrested the leader of the Muslim Brotherhood, a group that has supported ousted president Mohammed Mursi through a series of protests that have often turned violent.