Crude Oil Declines as Fed Doesn’t Announce Immediate Stimulus Measures

Oil fell 2.5 percent after Fed Chairman Ben S. Bernanke and his colleagues pledged to keep the benchmark interest rate at a record low through mid-2013 and said they are “prepared to employ” additional tools “as appropriate.” Economists including Kenneth Rogoff, a Harvard University economics professor and former Fed researcher, had said the Fed was likely to start a third round of asset purchases, nicknamed QE3.

“They didn’t do something that would have a tangible and immediate impact,” said Jason Schenker, president of Prestige Economics LLC in Austin, Texas. “Without QE3 to sort of give a sentiment and capital boost to the markets, the negative economic news is going to be a bigger drag that could weigh on crude.”

Crude for September delivery dropped $2.01 to $79.30 on the New York Mercantile Exchange, the lowest settlement since Sept. 29. Futures have fallen 17 percent in August and 13 percent this year.

Brent oil for September settlement fell $2.35, or 2.3 percent, to $101.39 a barrel at 2:44 p.m. in New York on the ICE Futures Europe exchange in London. Earlier, it tumbled $5, or 4.8 percent, to $98.74 to fall below $100 for the first time since Feb. 8.

 

(Bloombergnews)

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