Crude oil falls as Fed decision looms

Source: Agencies | December 18, 2013, Wednesday |

Online Edition

The price of oil fell yesterday as investors wait to see whether or not the US Federal Reserve will decide to start reducing its monetary stimulus this week.

Benchmark US 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 US$85 billion in asset purchases following the conclusion of its two-day meeting Wednesday, in light of some recent solid data on the US economy. Such a pullback may result in the dollar strengthening, making commodities priced in dollars more costly for overseas investors.

Others expect the Fed to wait until next year before tapering its stimulus program.

Markets are also monitoring fresh information on US stockpiles of crude and refined products.

Data for the week ending Dec. 12 are expected to show a draw of 4 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 American Petroleum Institute will release its report on oil stocks later yesterday, while the report from the Energy Department's Energy Information Administration — the market benchmark — will be out on Wednesday.

In London, the February contract for Brent crude, a benchmark for international oils, dropped 97 cents to 108.44 a barrel on the ICE Futures exchange.

In other energy futures trading on the Nymex:

— Wholesale gasoline was flat at US$2.65 a gallon.

— Heating oil lost 3 cents to US$2.96 a gallon.

— Natural gas rose 1 cent to US$4.29 per 1,000 cubic feet.

Energy

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Crude oil falls as Fed decision looms

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