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Oil falls below $106 ahead of Fed policy meeting



AP FILE PHOTO

BANGKOK — The price of oil fell below $106 a barrel Tuesday, anticipating that the US Federal Reserve’s two-day policy meeting will end with an announcement to scale back its unprecedented monetary stimulus.

Benchmark oil for October delivery was down 81 cents to $105.78 per barrel at early afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $1.62 to close at $106.59 on Monday.

The US central bank has been on a bond-buying spree that has pumped the economy full of money, pushing down interest rates and making loans more easily available. The aim of all that was to spur lending, growth and investment. Global stocks and commodities surged.

But recent data has shown the US is slowly recovering from the severe downturn that followed the collapse of Lehman Brothers in 2008, convincing Fed members that it might be time to wind down the stimulus program. Oil markets have reacted negatively to the prospect.

“Tapering might derail the recovery, and if that happens, there is less growth and then less demand for commodities like oil,” said Stan Shamu, market analyst at IG in Melbourne, Australia.

The contract for November delivery for Brent crude, the benchmark for international crudes used by many U.S. refineries, fell 51 cents to $109.56 a barrel in London.

In other energy futures trading in New York:

— Wholesale gasoline fell 0.5 cent to $2.701 per gallon.

— Natural gas rose 2.4 cents to $3.762 per 1,000 cubic feet.

— Heating oil fell 1.1 cents to $3.053 per gallon.


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Tags: Business , News , oil industry , oil prices , US Federal Reserve

  • Phoinex

    Can we expect the oil companies to lessen their greed right now! Oil prices in the world market have gone down and our peso is appreciating against the dollar. What other alibis are they planning to say to maintain it’s current price? There should be and a must roll back of oil prices in our country. Not just a mere .50 cents roll back but no less than a peso. The Energy department and NEDA should conduct a surprise audit inspection of the oil companies because surely they are enriching themselves. How many times and how much have they increased this year against the times they rolled back the price.

    • GewaltBarrage

      Best thing we can do is to conserve gas. Ride public transportation or walk as much as possible,

      • Phoinex

        I couldn’t agree more.

    • GewaltBarrage

      I think it is much cheaper to commute than to take the car.



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