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Oil prices rose in Asian trade today on expectations of fresh stimulus measures from the US Federal Reserve to perk up the struggling US economy, analysts said.
New York’s main contract, light sweet crude for delivery in January, gained three cents to $85.59 a barrel and Brent North Sea crude for January advanced eight cents to $107.41.
The US central bank’s policy setting Federal Open Market Committee (FOMC) is expected to announce new measures to stimulate the economy at the end of a two-day meeting that starts late today.
“Tonight the Fed begins a two-day love-in, which could see the announcement of more bond-buying ... which could give markets another leg up this month,” a report by IG Markets said.
Stubborn high unemployment in the world’s largest economy and oil consumer as well as the looming fiscal cliff give the FOMC every reason to expand its stimulus efforts, analysts said.
Traders are keeping an eye on what the Fed will do as the end approaches of its “Operation Twist” of selling short-term debt to buy longer-term debt.
There are signs policymakers will replace it with more outright bond purchases or “quantitative easing” aimed at lowering interest rates to encourage businesses to invest and hire.
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