Friday, July 15, 2011

Oil below $98 as investors eye US stimulus, debt (AP)

SINGAPORE ? Oil prices hovered below $98 a barrel Thursday in Asia amid speculation about a possible new round of U.S. monetary stimulus while a rating agency put the country's credit rating under review for a downgrade.

Benchmark oil for August delivery was down 27 cents to $97.78 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude rose 62 cents to settle at $98.05 on Wednesday.

In London, Brent crude rose 14 cents to $118.92 per barrel on the ICE Futures exchange.

Federal Reserve Chairman Ben Bernanke said Wednesday he is considering another round of Treasury bond purchases, known as quantitative easing, in a bid to lower interest rates and spur lending and economic growth.

A previous round of quantitative easing, which began last year and ended last month, helped lead to a weaker dollar and higher oil prices, since a cheaper U.S. currency makes commodities such as crude less expensive to investors with other currencies.

Weighing on crude prices was a threat by Moody's Investors Service on Wednesday to lower the United States' credit rating, saying there is a small but rising risk that the government will default on its debt.

Moody's said it will review the U.S. government's triple-A bond rating because the White House and Congress are running out of time to raise America's $14.3 trillion borrowing limit and avoid a default.

In other Nymex trading in August contracts, heating oil was steady at $3.10 a gallon while gasoline dropped 1.3 cents at $3.10 a gallon. Natural gas futures slid 1.8 cents at $4.39 per 1,000 cubic feet.

Source: http://us.rd.yahoo.com/dailynews/rss/energy/*http%3A//news.yahoo.com/s/ap/20110714/ap_on_bi_ge/oil_prices

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