Last update: 05-Dec-2013 11:31 pm
Thursday, December 05, 2013
Trinidad & Tobago Guardian Online
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Oil slips ahead of Fed policy decision
The price of oil slipped 1 per cent Tuesday as investors prepared for an expected reduction in the US Federal Reserve’s monetary stimulus. Benchmark crude for October delivery fell $1.17, or 1.1 per cent, 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 programme—currently running at $85 billion a month—flowed through the financial system. But recent data have shown the US 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 today.
Developments in Syria and Libya also put downward pressure on oil prices. Negotiations between Russia and the US on Syria’s chemical weapons have removed the threat of an imminent US military strike. And reports have signaled the return of more Libyan crude oil to the market, after a slowd down in production and exports.
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