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Oil prices inches up as traders await Fed decision

Oil prices inches up as traders await Fed decision

Oil prices rose Wednesday with the Federal Reserve about to decide how to spend billions of dollars to re-energize the economy.
Benchmark oil for December delivery rose 72 cents to $84.62 a barrel in midday trading on the New York Mercantile Exchange.
The Federal Reserve is expected to announce it will buy Treasurys in an effort to boost economic growth but there are questions about how much money the Fed will allocate for that program and how long it will take to complete. Some analysts think the Fed could buy about $500 billion in government securities, and that amount is factored into prices for oil and other commodities.
If the amount falls within expectations, oil prices will probably retreat, Tradition Energy analyst Gene McGillian said. If the amount is higher, then it likely will weaken the dollar and oil prices will rise.
Since commodities are priced in dollars, a weaker dollar means they become more attractive to buyers using foreign currencies.
After the decision is released, "it's really going to come down to how the economy seems to play out, I think, especially as we go through the holiday shopping season to see if consumers are more willing to spend this year," he said.
In its weekly report, the Energy Department said crude inventories increased by 2 million barrels to 368.2 million barrels for the week ending Oct. 29. The total was 9.6 percent more than the year-ago level and remained at the upper limit of the average range for this time of year.
Linda Rafield, Platts senior oil analyst, said crude supplies grew as refineries processed less oil for gasoline and other products.
Gasoline stockpiles fell by 2.7 million barrels to 212.3 million barrels, according to the Energy Information Administration. Demand for gasoline over the past four weeks was 9 million barrels a day, unchanged from the year-ago period.
Supplies of distillate fuel, which include diesel and heating oil, dropped by 3.6 million barrels to 164.9 million barrels.
In other Nymex trading in December contracts, heating oil added 3.11 cents at $2.3247 a gallon, gasoline gained 2.22 cents at $2.1318 a gallon and natural gas fell 5.5 cents to $3.815 per 1,000 cubic feet.
In London, Brent crude rose 89 cents to $86.30 a barrel on the ICE Futures exchange.


Updated : 2021-05-18 18:13 GMT+08:00