The price of oil edged lower Tuesday as investors waited to see whether or not the U.S. Federal Reserve would start reducing its economic stimulus program at a key policy meeting this week.
Benchmark U.S. crude for January delivery fell 2 cents to US$97.46 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, a benchmark for international oils, dipped 10 cents to 109.31 a barrel on the ICE exchange in London.
Investors are increasingly beginning to think that the U.S. Federal Reserve could decide to start scaling back its $85 billion in asset purchases at the meeting, which wraps up Wednesday. Such a pullback would likely result in the greenback strengthening, making commodities priced in dollars more costly for overseas investors, therefore cutting demand.
Expectations grew that the Fed would start reducing the program following some reports Monday indicating a strengthening U.S. economy. Factory output grew for a fourth straight month in November, and U.S. workers boosted their productivity at the fastest rate in the third quarter since 2009.
Energy prices are expected to remain in check over the next few years, according to an annual report by the U.S. Energy Information Administration, which forecasts that domestic oil output may rise to 9.5 million barrels per day by 2016, just shy of the 1970 record of 9.6 million barrels per day.
In other energy futures trading on the Nymex:
— Wholesale gasoline was little changed at $2.660 a gallon.
— Heating oil was little changed at 1.5 cents to $2.99 a gallon.
— Natural gas fell 0.9 cents to $4.288 per 1,000 cubic feet.
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