ND: OIL FUTURES: Crude Falls in Choppy Trading Ahead of FOMC
By John M. Biers
NEW YORK -(Dow Jones)- Crude oil futures nudged into negative territory Tuesday morning ahead of Wednesday's meeting of a key Federal Reserve committee.
Front-month crude oil futures on the New York Mercantile Exchange were trading at $89.61 a barrel, down 17 cents or 0.2% in choppy trading Tuesday morning. Brent crude futures were off 15 cents to $106.05 a barrel.
Crude had been trading modestly higher earlier Tuesday morning before turning negative. Traders said there was no particular reason for the shift into red territory.
The trading comes one day ahead of a meeting of the Federal Open Market Committee at which the U.S. Federal Reserve could move to enact another round of bond-buying to stimulate the economy. Past rounds of this program, known as quantitative easing, have spurred oil prices higher by lowering the value of the dollar. Because oil is traded in dollars, the cost of oil diminishes to buyers in other currencies when the dollar is weak.
The European Central Bank could also take action to stimulate the economy when it meets Thursday. On Friday, a busy week of economic news concludes with the latest U.S. jobs report.
"The market continues to be in a wait-and-see mode," said John Kilduff, a trader with Again Capital. "We need the catalyst, so we're waiting for the next couple of days to play out."
"We're in a range-bound period until news brings us out of it," said Ray Carbone, president of Paramount Options, a brokerage company.
