CNBC: Oil higher, but choppy awaiting Fed, German court
NEW YORK (Reuters) - Brent oil futures edged higher in seesaw trading on Tuesday and U.S. crude pushed back above its 200-day moving average as expectations that the U.S. Federal Reserve will act to bolster the economy lent support and countered pressure from an improved supply picture.
The U.S. central bank's policy committee concludes a two-day meeting on Thursday and some analysts and investors expect the Fed will launch a third round of bond-buying because of recent weak U.S. economic data. Additional stimulus would likely weaken the dollar and boost dollar-denominated oil prices.
The euro climbed back to a four-month peak against the dollar on expectations a German court will back the euro zone rescue process. The German court decision is expected on Wednesday.
Higher production from the Organization of the Petroleum Exporting Countries in August and recovering U.S. production after Hurricane Isaac's trek last week through the Gulf of Mexico helped keep prices in check.
Moody's ratings agency warned the U.S. credit rating may be downgraded if 2012 budget negotiations do not produce debt reducing policies, adding more pressure to the dollar and helping support crude.
"Moody's downgrade pressured the dollar and added support for crude, but markets are waiting for the German court and Fed decisions," said Phil Flynn, analyst at Price Futures Group in Chicago.
Brent October crude rose 20 cents to $115.01 a barrel by 11:37 a.m., having traded from $114.37 to $115.20. The Brent October contract expires on Thursday.
U.S. October crude rose 54 cents to $97.08 a barrel, pushing back above the 200-day moving average of $96.61, a closely watched technical indicator.
The $97.31 session high was still almost a dollar below the $98.29 intraday peak from August 23. Prices fell to $93.95 on August 23 and have remained in the $94-$98 range since.
(Additional reporting by Peg Mackey in London and Osamu Tsukimori in Tokyo; Editing by Marguerita Choy)
