Oil Slips Ahead of Fed Policy Decision

The price of oil slipped 1 percent Tuesday as investors prepared for an expected reduction in the U.S. Federal Reserve's monetary stimulus.

Benchmark crude for October delivery fell $1.17, or 1.1 percent, to close at $105.42 a barrel on the New York Mercantile Exchange. Oil fell $1.62 on Monday.

The central bank has been buying financial assets, such as bonds, in an attempt to push down interest rates and make loans more easily available. Global stocks and commodities surged as the new money generated by the program — currently running at $85 billion a month — flowed through the financial system.

But recent data have shown the U.S. economy is in better shape, which may convince Fed members that it is time to wind down the stimulus — so-called tapering — at the end of a two-day policy meeting on Wednesday.

Developments in Syria and Libya also put downward pressure on oil prices. Negotiations between Russia and the U.S. on Syria's chemical weapons have removed the threat of an imminent U.S. military strike. And reports have signaled the return of more Libyan crude oil to the market, after a slowdown in production and exports.

Investors will also be monitoring fresh information on U.S. stockpiles of crude and refined products.

Energy Department data for the week ending Sept. 6 are expected to show a decline of 1.5 million barrels in crude oil stocks, while gasoline stocks are expected to remain unchanged, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

The contract for November delivery for Brent crude, the benchmark for international crudes used by many U.S. refineries, dropped $1.88 to $108.19 a barrel on the ICE Futures exchange in London.

In other energy futures trading in New York:

  • Wholesale gasoline fell 6 cents to $2.66 per gallon.
  • Natural gas rose 1 cent to $3.75 per 1,000 cubic feet.
  • Heating oil declined 7 cents to $3.00 per gallon.

Pamela Sampson in Bangkok contributed to this report.

Copyright 2015 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
Chemicals, Sales Account Manager, Oil & Gas - Midland - Odessa TX
Expertise: Business Development|Marketing|Sales
Location: Midland, TX
 
Functional Consultant Job
Expertise: IT - Analysis & Management|IT - Software Development|Project Management
Location: Denver, CO
 
Corporate Sales - Marcellus Shale - Surface
Expertise: Sales
Location: Pennsylvania, PA
 
search for more jobs

Brent Crude Oil : $54.94/BBL 0.88%
Light Crude Oil : $51.79/BBL 0.21%
Natural Gas : $3.65/MMBtu 6.10%
Updated in last 24 hours