Light, sweet crude reversed earlier losses Tuesday as anticipation grew on whether the Fed will announce a stimulus to aid the U.S.
October oil climbed up $1.19 to settle at $86.89 a barrel at expiration on the New York Mercantile Exchange. Its European counterpart added $1.40, or 1.28%, to end the session at $110.54 a barrel on the ICE Futures Europe exchange.
On Tuesday, the Federal Open Market Committee commenced a two-day meeting in which analysts predict the Fed will release another round of quantitative easing to help the weakening economy. The Fed's two previous instances of quantitative easing (QE) had a bullish effect on oil and gasoline because the monetary policy tool weakens the dollar; and traders envision a similar outcome for oil and gasoline should the Fed implement another round of QE. Oil, a dollar-denominated commodity, becomes cheaper for investors holding foreign currencies when the greenback loses value.
The intraday range for WTI was $85.11 to $87.46, while Brent traded between $108.93 and $111.53 Tuesday.
Meanwhile, front-month natural gas futures ended 3.1 cents lower on milder weather. After trading between $3.779 and $3.859, natural gas futures settled at $3.798 per thousand cubic feet.
Gasoline for October delivery added 0.2 percent to settle at $2.70.
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