“Oil dropped for a second day, erasing most of its weekly gain in London, after U.S. Federal Reserve officials signaled the winding down of a stimulus program this year in the world’s biggest crude user.
Brent futures dropped as much as 1.6 percent, trimming its weekly increase to 0.2 percent. Members of the Federal Open Market Committee said they will probably end their $85 billion monthly bond purchases sometime in 2013, according to minutes of its latest meeting released yesterday. The U.S. unemployment rate may have held at 7.7 percent, the lowest since December 2008, according to the median forecast of economists surveyed by Bloomberg ahead of a Labor Department report today.
“The U.S. is at a dangerous point where it could declare victory too early,” said Guy Wolf, a strategist at London-based commodities broker Marex Spectron Group Ltd., who predicts Brent will trade from $100 to $125 this quarter. “The risks to growth estimates in the U.S. in the second half are quite high. Removal of monetary stimulus combined with a fiscal tightening could be disastrous.”
Brent for February settlement slid as much as $1.76 to $110.38 a barrel on the London-based ICE Futures Europe exchange. It traded for $110.82 at 12:34 p.m. local time.
West Texas Intermediate for February delivery fell as much as $1.40 to $91.52 a barrel on theNew York Mercantile Exchange. The graded has added 1.2 percent this week. Brent was $18.97 more than WTI, compared with $19.27 yesterday….”
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