By Luke Pachymuthu
SINGAPORE, April 25 (Reuters) – Brent crude stayed above
$118 a barrel on Wednesday as investors marked time ahead of the
outcome of a policy meeting by the U.S. Federal Reserve, with
some investors hoping to hear hints of further monetary easing.
A third round of monetary stimulus, also called QE3, via
bond-buying by the Fed should boost liquidity in markets and
lift appetite for riskier assets like oil.
“We are not expecting drastic changes from the Fed, but we
are hoping to hear hints about QE3,” said Ken Hasegawa, a
commodity derivatives manager at Newedge Brokerage.
“Trading will be quiet throughout the day until we get
closer to the end of the meeting.”
Brent crude rose 13 cents to $118.29 a barrel by
0218 GMT, while U.S. crude was up 15 cents at $103.70.
Analysts say the U.S. central bank will likely show it is
slightly more upbeat on the economy but in little hurry to raise
borrowing costs.
Investors wishing for clues into the prospect of a further
monetary easing may be disappointed, they say, with U.S.
economic growth just firm enough to weaken the case for more
stimulus through Fed purchases of government or mortgage bonds.
But the latest U.S. data was a mixed bag, showing February
home prices rising for the first time in 10 months while a
measure of consumer confidence last month fell more than
expected.
Also supporting U.S. crude, oil inventories in the world’s
top consumer fell last week for the first time in five weeks,
data from the American Petroleum Institute (API) showed on
Tuesday, against expectations for a build.
U.S. crude stockpiles fell by 985,000 barrels in the week to
April 20, compared with analyst expectations of a
2.7-million-barrel increase.
Gasoline stocks fell 3.6 million barrels, dropping more
sharply than the expected 900,000 barrels, and distillate
inventories decreased 3.56 million barrels, the API said.
The U.S. Energy Information Administration’s own stockpiles
report is due later on Wednesday.
(Editing by Manolo Serapio Jr. and Ed Davies)
