Brent oil price slides to under $114 a barrel as traders sell on US Fed comments

The price of Brent oil futures continues a two day slide to under $114 a barrel as traders and investors sell oafter the latest US Fed comments reveal that they may soon allow US interest rates to rise slightly, spooking the market.

Latest Brent Oil Price

In London, Brent crude oil futures for April 2013 delivery was trafing at $113.77 a barrel, 17:45 GMT on the ICE Futures Exchange, or 1.6 percent lower on the day.

The drop extended Brent crude’s largest one day drop in 2013 on Wednesday, alongside declines in other commodities and equities. Rumours that a hedge fund was liquidating positions also had helped pressure oil prices in general, although there was no evidence of liquidation by any specific fund.

US Fed Comments

Oil prices have been pushed lower in the last 48 hours by a transcript of the latest Fed meeting that showed some policymakers expressing doubts about the central bank’s bond-buying program. If the Fed curtails or ends the program earlier than anticipated, that could affect economic growth in the US and reduce demand for crude oil.

Meanwhile, a report on Tuesday showed that confidence among US homebuilders slipped, as builders remain concerned about the sturdiness of the American economy and the risk of rising unemployment.

Brent Overbought?

“Brent was overbought amid overwhelming investor interest, an increased geopolitical premium and bullish macro sentiment, while short term fundamentals simply do not justify sustained gains past $120,” said Andrey Kryuchenkov, an analyst at VTB Capital in London.

The price of Brent crude rose by $10 a barrel in the first six weeks of 2013 to hit a 9 month high above $119 on 8th February.

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This article was written by: JR @ liveoilprices.co.uk

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Brent oil price slides to under $114 a barrel as traders sell on US Fed comments