Crude oil prices down in Asian trade

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

Though the Federal Reserve said that it would continue with the $85-billion a month bond-buying scheme, it 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) crude for December delivery slipped 20 cents to $96.57 in mid-morning Asian trade and Brent North Sea crude for December dropped 30 cents to $109.56.

“The (Fed) statements reinforced the majority view that the Fed will be at a standstill,” 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 that 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,” Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at Ernst & Young, said.

The US Department of Energy had 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.

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