Oil prices move between small gains, losses as ahead of key Federal Reserve meeting

Oil is moving between small gains and losses ahead of a meeting of the Federal Reserve.

Benchmark West Texas Intermediate crude was up nine cents at US$85.65 a barrel near midday Tuesday in New York after having fallen for five straight sessions.

The Fed holds a two-day policy meeting and is expected to unveil a new bond-buying program designed to help the U.S. economy.

Traders are also watching budget negotiations in Washington. However, there was little sign that Congress and the White House were near an agreement that would avoid tax increases and spending cuts that economists warn pose the threat of another recession.

Oil rose earlier after a survey indicated German investors believe Europe’s largest economy may escape a recession despite the region’s economic struggles.

In other trading, Brent crude, which is used to price international varieties of oil, increased 24 cents to US$107.57 a barrel in London.

Other futures on the New York Mercantile Exchange, heating oil rose two cents to US$2.92 a U.S. gallon (3.79 litres), wholesale gasoline rose one cent to US$2.61 a gallon and natural gas fell one cent to US$3.45 per 1,000 cubic feet.