Crude Oil Waiting for FOMC with Light Trading

Trade in crude-oil futures was light in London on Tuesday morning, as investors stayed on the sidelines ahead of Wednesday’s decision and subsequent press conference by the Federal Open Market Committee on whether, when and by how much it will reduce its stimulus of the U.S. economy.

Prices of the two main benchmark contracts were slightly lower but broadly underpinned by geopolitical tensions in the Middle East, particularly in Syria where there is no end in sight to the civil war, and in Turkey where escalating social tensions threaten to destabilize the government.

Brent stalled near 10-month highs on Monday having broken out of its recent range at the end of the previous week. An unplanned outage at the North Sea Oseberg field also provided some support.

WTI, meanwhile, is trading around nine-month highs.

At 1005 GMT, the front-month August Brent contract on London’s ICE futures exchange was down 16 cents at $105.31 a barrel.

The front-month July light, sweet crude contract on the New York Mercantile Exchange was trading 15 cents lower at $97.62 a barrel.

The possibility that Federal Reserve Chairman Ben Bernanke will signal an end to the policy of quantitative easing has sent a shiver through many asset classes.

via WSJ

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza