Oil nears $107 as market awaits Fed, supply data

The Associated Press

The price of oil neared $107 as traders looked ahead to the outcome of a Fed meeting later Wednesday and as violence persisted in energy producer Iraq, where Islamic militants attacked the country's largest refinery.

Benchmark U.S. crude for July delivery rose 38 cents to $106.73 a barrel on the New York Mercantile Exchange by midafternoon in Asia. Brent crude, a benchmark used to price international oils, added 13 cents to $113.58 a barrel on the ICE Futures exchange in London.

Markets are awaiting the conclusion of the Federal Reserve's two-day policy meeting, when it will release its latest forecasts for the world's biggest economy that will also provide guidance on future energy demand.

Also scheduled for Wednesday was the latest reading on U.S. supplies, with analysts forecasting a drop of 1.4 million barrels in the week ending June 13, according to a survey by Platts.

In Iraq, troubling sectarian violence was casting a shadow over future crude supplies from the country, which has been rebuilding its energy infrastructure. The Paris-based International Energy Agency said this week that so far the conflict has not put supply at risk. The attack on the Beiji refinery was unlikely to change that forecast — all gasoline, cooking oil and power station fuel it produces is used domestically — but it further heightened uncertainty over how Iraq's energy infrastructure will fare as fighting rages.

In other energy futures trading:

— Wholesale gasoline added 0.2 cent to $3.06 a gallon.

— Natural gas slipped 0.1 cent to $4.708 per 1,000 cubic feet.

— Heating oil barely budged at $3.03 a gallon.