Crude Oil Futures on Track for Weekly Gain on U.S. Economic Recovery
Crude Oil Futures on Track for Weekly Gain on U.S. Economic Recovery Reuters

Crude oil prices declined slightly in Asian trading Wednesday and hovers above $88 a barrel after surging in the previous session.

Light sweet crude for the December delivery declined 0.14 percent or 12 cents to $88.59 a barrel in electronic trading on the New York Mercantile Exchange during the Asian trading hours. Brent crude oil futures for the December delivery fell 0.14 percent or 16 cents to $110.91 a barrel on the ICE futures exchange in London.

Oil futures declined as concerns about weak demand and the situation in Greece offset supply worries after violence in the Middle East escalated. The Greek parliament will vote on a set of fresh austerity measures worth of 13.5bn euros Wednesday aimed at opening the door to further aid. Greek protesters took to the streets against the fresh package of budget cuts which the government is trying to push through at the troika’s request.

Uncertainty regarding the U.S. election eased as President Barack Obama won his re-election bid for the presidency Tuesday after clinching a convincing victory in the crucial state of California. The 51-year-old first African-American President was able to snag crucial battleground states such as Pennsylvania, Virginia and Wisconsin to easily surpass the 270 electoral votes needed to win the presidency.

"Now the focus will be on the fiscal cliff discussions and on the Iranian dispute, all that is still ahead of us. The market appears evenly balanced with economic worries on one hand and the geopolitical worries and winter drawdown supporting. We see high volatility, but sideways trading for the rest of the year," Tony Nunan, an oil risk manager at Mitsubishi Corp in Tokyo, told Reuters.

Crude oil futures surged Tuesday as escalation of Middle East tensions and an explosion at the main oil pipeline feeding a refinery on the western edge of the Syrian city of Homs sent concerns over supply disruption. Meanwhile, the American Petroleum Institute said late Tuesday that crude inventories fell by 27,000 barrels for the week ending Nov. 2 against expectations that crude stocks would be higher.

On Tuesday, the light sweet crude for the December delivery surged 3.6 percent or $3.06 and settled at $88.71 a barrel on the New York Mercantile Exchange while Brent crude for the December delivery gained 3.1 percent or $3.34 and settled at $111.07 a barrel.

After the markets open Wednesday, the U.S. Energy Information Administration (EIA) is due to report weekly inventory data expected to show that stockpiles increased by 1.8 million barrels last week.