Sept. 10 (Bloomberg) -- Oil fluctuated as Greece struggled to qualify for aid payments and amid speculation the Federal Reserve will announce measures to revive the economy this week.
Futures traded in a $1.26-a-barrel range in New York after Greek Prime Minister Antonis Samaras failed to secure agreement on spending cuts. Traders are focused on the Fed, which starts a two-day policy meeting on Sept. 12. The Fed has completed two rounds of asset purchases known as quantitative easing and may implement a third.
“The market is in wait-and-see mode ahead of several important events this week,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $1.4 billion. “The biggest factor for the oil market this week will probably be the Fed meeting and whether they announce further quantitative easing.”
Oil for October delivery fell 8 cents to $96.34 a barrel at 11:07 a.m. on the New York Mercantile Exchange. Prices are down 2.5 percent this year.
Brent for October settlement rose 66 cents, or 0.6 percent, to $114.91 a barrel on the London-based ICE Futures Europe exchange. The European benchmark was at a premium of $18.57 to New York-traded West Texas Intermediate crude, up from $17.83 on Sept. 7.
Samaras is meeting officials from the euro area, the European Central Bank and the International Monetary Fund today after failing to secure an agreement from his coalition partners on budget reductions required by creditors for a bailout. Greece needs their approval to receive its next tranche of funds.
Euro Slump
The euro dropped as much as 0.4 percent to $1.277, the first decline in four days. A weaker common currency and stronger dollar decrease the appeal of dollar-denominated raw materials as an investment.
Germany’s Federal Constitutional Court in Karlsruhe will decide whether to suspend the 500 billion-euro ($639 billion) European Stability Mechanism on Sept. 12. On the same day, Dutch voters will decide whether to back parties questioning an expansion of European Union powers.
“We have a lot happening the week with the German court decision, the Dutch election and the Fed meeting,” O’Grady said.
China’s industrial output rose the least in three years, the National Bureau of Statistics said yesterday. Chinese imports fell 2.6 percent in August from a year earlier as exports rose 2.7 percent, the customs bureau said today.
Japan’s economy expanded in the second quarter at half the pace the government initially estimated. Gross domestic product grew an annualized 0.7 percent in the three months through June, the Cabinet Office said in Tokyo.
Biggest Consumers
The U.S., China and Japan are the world’s biggest oil- consuming countries, accounting for a combined 37 percent of world demand, according to BP Plc’s Statistical Review of World Energy. The 27 members of the EU were responsible for 16 percent of global oil use in 2011, BP said.
Italy’s economy contracted more than initially reported in the second quarter. GDP shrank 0.8 percent from the previous three months, more than the 0.7 percent first reported by the National Statistics Institute on Aug. 7.
“Oil should move lower this week,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “There really isn’t the demand out there to support these prices.”
Oil also fell as Saudi Arabian Oil Minister Ali al-Naimi said current prices aren’t justified by supply and demand. He said the kingdom is monitoring prices and always “taking necessary steps to make sure supply is in line with demand and will meet the needs of its customers,” according to a Saudi Press Agency report.
Naimi said Saudi Arabia will continue, in cooperation with fellow Gulf Cooperation Council and OPEC member states, to “preserve the stability of the international oil market,” the agency reported. The kingdom is the world’s leading exporter.
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