Oil Futures Fall as Crude Market Waits for Fed Announcement; Expectations Abound That the Fed will Begin Scaling Back QE Program in Near Future
NEW YORK--U.S. oil futures declined Tuesday as traders were reluctant to place big bets while Federal Reserve officials debated the future of the central bank's key economic stimulus program.</br></br>Light, sweet crude for January delivery settled 26 cents, or 0.3%, lower at $97.22 a barrel on the New York Mercantile Exchange. Nymex prices traded in a narrow range for most of the session as market participants chose to wait until Wednesday afternoon for potential clarity on the Fed's easy-money policies.</br></br>"It's a directionless trade," said John Kilduff, founding partner of Again Capital LLC, a New York hedge fund that focuses on energy, referring to the lack of significant price movement.</br></br>He added, "You can make a strong argument on both sides, and there's a lot of room for the Fed to surprise us either way."</br></br>Many traders expect the Fed to begin scaling back its so-called quantitative-easing program, in which it buys $85 billion each month in mortgage-backed securities and longer-term Treasury bonds, in the near future. The program has boosted oil prices by weakening the dollar, making crude cheaper to buy with other currencies.