Crude oil edges lower as Fed stimulus speculation rises ahead of meeting
The price of oil edged lower Tuesday as investors wait to see whether the U.S. Federal Reserve will decide to start reducing its monetary stimulus this week.
Benchmark West Texas Intermediate crude for January delivery slipped 26 cents to US$97.22 a barrel on the New York Mercantile Exchange.
Some investors expect the Fed to start scaling back its $85 billion in asset purchases following the conclusion of its two-day meeting Wednesday in light of some recent solid data on the U.S. economy. Such a pullback may result in the dollar strengthening, making commodities priced in dollars more costly for investors using other currencies.
Others expect the Fed to wait until next year before tapering its stimulus program.
Markets are also monitoring fresh information on U.S. stockpiles of crude and refined products.
Data for the week ended Dec. 12 are expected to show a draw of four million barrels in crude oil stocks and a build of 1.4 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The report from the U.S. Energy Department's Energy Information Administration â€” the market benchmark â€” will be out on Wednesday.
In London, the February contract for Brent crude, a benchmark for international oils, dropped 97 cents to US108.44 a barrel on the ICE Futures exchange.
In other energy futures trading on the Nymex, wholesale gasoline was flat at US$2.65 a U.S. gallon (3.79 litres), heating oil lost three cents to US$2.96 a gallon and natural gas rose one cent to US$4.29 per 1,000 cubic feet.
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