Oil prices plunge to a 4 week low ahead of Federal Reserve meeting, US jobs data

31-Jul-13

The price of oil closed at a four-week low as traders await results of the Federal Reserve meeting and numbers later in the week, including U.S. jobs figures. Fed officials finish a two-day meeting on Wednesday in Washington. Benchmark oil for September delivery fell to US$103 per barrel on the Nymex- the lowest closing price since July 3. Brent crude, the benchmark for international crudes, settled at US$106.91 on the ICE Futures exchange in London, as per Associated Press. The market awaits latest appraisal by the Federal Reserve of the U.S. economy and whether a change to the central bank’s stimulus strategy is warranted. The Fed has been buying US$85 billion of financial assets a month in an attempt to keep long-term borrowing rates low and help shore up the U.S. economic recovery. However, the Fed is widely expected to wind down the program later this year if the economy continues to improve. On Wednesday, the government releases the first reading on Q2 gross domestic product. Analysts expect the economy expanded more slowly last quarter compared with the 1.8% growth reported for the first three months of the year. Traders look to see whether the Energy Department will report another draw in oil supplies after a surprisingly large drop of 30 mln barrels over the past month.