Commodities

Crude oil dips in Asia on Fed bond tapering plans

PTI Singapore | Updated on November 21, 2017

Crude oil prices slipped in Asia today after Federal Reserve Chairman, Ben Bernanke, signalled the US central bank would wind down its stimulus programme later this year, analysts said.

New York’s main contract, light sweet crude for delivery in July, was down $1.68 to $96.56 a barrel on its last day of trading, while Brent North Sea crude for August shed $1.63 to $104.49.

Ahead of yesterday’s meeting of the Fed’s policy committee, markets had been rife with speculation on when it would begin reeling in its $85 billion-a-month bond-purchase programme.

While the Fed decided to maintain the programme for now, Bernanke said it would be “appropriate to moderate the monthly pace of purchases later this year” if economic data come in as forecast.

He also said the programme could be ended completely in mid-2014.

“Bernanke’s comments have caused everything from equities to commodities to pull back a little this morning,” Kelly Teoh, market strategist at IG Markets in Singapore, told AFP.

“There is also a general consensus that global growth is slowing down, and that is also weighing on prices.”

The dip in oil prices erased last week’s gains, which were fuelled by fears the civil war in Syria could escalate and push the crude-rich Middle East into a wider conflict.

“The concerns about Syria are still there, but at the moment people are selling and preferring to hold on to their cash,” Teoh said.

Published on June 20, 2013

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