Oil falls as Fed's brighter economic outlook signals a possible unwinding of stimulus measures
NEW YORK (AP) -- The price of oil fell slightly Wednesday as the Federal Reserve indicated it's closer to easing up on economy boosting measures that have been a boon for commodities.
Oil swung in a range of about $1 after the Fed delivered a mixed message: The central bank said it would continue buying bonds at a pace of $85 billion a month, which helps keep interest rates at low levels. But chairman Ben Bernanke offered a more optimistic outlook for the U.S. economy and said the Fed could start scaling back on the bond purchases later this year if conditions continue to improve.
Timothy Duy, a University of Oregon economist who tracks the Fed, called the statement "an open door for scaling back asset purchases as early as September."
Benchmark oil for July delivery dropped 20 cents to finish at $98.24 a barrel on the New York Mercantile Exchange.
Meanwhile the nation's inventory of crude oil grew by 300,000 barrels, or 0.1 percent. At 394.1 million barrels, supplies are 1.8 percent above year-ago levels, the Energy Information Administration said in its weekly report. Analysts expected supplies to drop by 1 million barrels.
Brent crude, a benchmark for many international oil varieties, rose 10 cents to end at $106.12 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
- Wholesale gasoline rose 1 cent to finish at $2.89 a gallon.
- Heating oil rose 1 cent to end at $2.97 per gallon.
- Natural gas gained 6 cents to finish at $3.96 per 1,000 cubic feet.
Pablo Gorondi in Budapest, Pamela Sampson in Bangkok and Martin Crutsinger in Washington contributed to this report.