Oil below $83 in Europe ahead of new data on supply, economic performance

Oil hovers below $83 ahead of new market data

Oil prices hovered below $83 a barrel Wednesday as markets awaited new inventory figures and indicators about the health of the U.S. economy.

By early afternoon in Europe, benchmark oil for November delivery was down 25 cents to $82.57 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.35 to settle at $82.82 on Tuesday.

Oil prices broke out of a year-long range between $70 and $80 last week as global stocks rallied and the U.S. dollar fell. Crude traders often look to stock markets as a measure of overall investor sentiment while oil becomes cheaper for investors with foreign currencies when the dollar drops.

However, the expectation of fresh indicators added a note of caution, dampening the rise.

The Energy Department’s Energy Information Administration reports its weekly supply data later Wednesday.

A report by the American Petroleum Institute late Tuesday showed U.S. crude supplies unexpectedly jumped last week — suggesting demand may be weaker than anticipated.

Investors are also looking ahead to Friday’s nonfarm payrolls data for September. Most analysts expect the figures to show the U.S. economy is not creating a significant amount of jobs.

“Based on the fundamental data, the market is still amply supplied with crude oil,” Commerzbank said in a report, adding that a “majority of OPEC members prefer a price range from $70 to $80.”

JBC Energy noted that the latest financial stability report from the International Monetary Fund said there was still significant uncertainty about the global financial system.

In other Nymex trading in November contracts, heating oil was down 0.72 cent at $2.2954 a gallon and gasoline fell 0.25 cent to $2.123 a gallon. Natural gas rose 2.4 cents to $3.767 per 1,000 cubic feet.

In London, Brent crude was down 32 cents to $84.52 a barrel on the ICE Futures exchange.