Oil prices ease in Asian trade

Last Updated: Thursday, October 31, 2013 - 10:00

Singapore: Oil prices fell in Asian trade today, in line with regional equities, after the US Federal Reserve kept its stimulus programme unchanged, analysts said.

But while maintaining the USD 85 billion a month bond-buying scheme, the Fed gave a rosier-than-expected summary of the economy that fuelled rumours it will start winding down soon.

This supported the greenback, making dollar-priced crude more expensive, hurting demand and putting downward pressure on prices.

New York's main contract West Texas Intermediate (WTI) for December delivery slipped 20 cents to USD 96.57 in mid-morning Asian trade, and Brent North Sea crude for December dropped 30 cents to USD 109.56.

"The (Fed) statements reinforced the majority view that the Fed will be at a standstill," said Kelly Teoh, market strategist at IG Markets in Singapore, said in a note.

Analysts noted that the statement did not downgrade the outlook for the economy and suggested it could begin to scale back its stimulus programme as early as the next monetary policy meeting in December.

Continued weak US demand highlighted by rising energy stockpiles is also helping push oil prices lower.

"WTI fell due to a build up in inventory," said Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at Ernst & Young.

The US Department of Energy said in a report yesterday that oil stocks rose 4.1 million barrels last week, well above the Dow Jones Newswires's consensus estimate of 2.2 million barrels.

It was the sixth consecutive weekly increase in supplies in the world's largest economy.

AFP
First Published: Thursday, October 31, 2013 - 10:00
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