Oil rises above $98 ahead of Fed meeting
Price of oil rises above $98 per barrel as traders wait for US central bank meeting
BANGKOK (AP) -- Oil prices rose Monday ahead of a critical meeting of U.S. central bank policymakers later in the week.
Benchmark oil for July delivery rose 28 cents to $98.14 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract for July delivery rose $1.16 to close at $97.85 a barrel on the Nymex amid concerns about a possible escalation in Syria's civil war.
The Fed has been supporting the U.S. economy by buying $85 billion in bonds every month as part of a plan to keep interest rates low and encourage borrowing, spending and investing. Recent signs of a recovery, however, have raised questions about whether the Fed might start to pull back.
Some investors worry that long-term interest rates could spike when the Fed pulls back, threatening the economic recovery. The Fed will start a two-day meeting Tuesday to discuss the central bank's next steps.
"Ultimately markets are likely to successfully transition to a world of reduced Fed asset purchases but this may take a while. In the meantime market stress is set to remain elevated," said analysts at Credit Agricole CIB in a market commentary.
President Barack Obama's decision last week to provide weapons to rebels fighting the forces of Syrian President Bashar Assad pushed up oil prices Friday. The Middle East is a key source of crude oil and important transit routes cross the region, so conflicts which threaten disruptions in crude production or supply usually push oil prices higher.
Brent crude, a benchmark for many international oil varieties, rose 32 cents to $106.25 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
— Wholesale gasoline rose 4 cents to $2.90 a gallon.
— Heating oil added 1 cent to $2.97 per gallon.
— Natural gas rose 3.6 cents to $3.769 per 1,000 cubic feet.
