SINGAPORE–Oil prices edged lower in Asian trade Tuesday as dealers awaited a two-day U.S. Federal Reserve policy meeting, looking for signals on the bank’s plans for its stimulus program. New York’s main contract, West Texas Intermediate (WTI) for delivery in December, was down 21 cents at US$98.47 in afternoon trade, while Brent North Sea crude for December shed 41 cents to US$109.20. The Fed’s Federal Open Market Committee (FOMC) kicks off its meeting Tuesday. Although the FOMC is expected to maintain its US$85 billion-a-month asset purchase program, investors will be closely watching for clues about when a pullback might begin.
Vanessa Tan, investment analyst at Phillip Futures in Singapore, said the bank is unlikely to change course owing to the impact of the 16-day government shutdown this month, as well as lackluster economic data. “Such quantitative easing would continue to buoy equities,” she said. Investors are also keeping an eye on a significant reduction in Libyan supplies, Tan said.
Production in the OPEC member has been disrupted for months after labour unrest forced terminals to shut, slashing output to below 100,000 barrels per day. Before the shutdowns, Libya was producing between 1.5 million and 1.6 million barrels daily. Production has increased in recent weeks, but an uptick in protests has raised concerns about exports owing to near-daily attacks and bombings that some fear could lead to civil war.