Oil prices stabilise ahead of Fed meeting

Tuesday 26 April 2011 19.37
Oil market - Saudi remarks limit gains
Oil market - Saudi remarks limit gains

World oil prices stabilised today as many traders awaited a crucial interest rate decision from the US Federal Reserve.

Brent North Sea crude for delivery in June rose 30 cents to $123.96 a barrel in London trade following a four-day Easter break.

New York's main contract, light sweet crude for June, fell 14 cents to $112.14 a barrel. It had reached a 2.5-year high of $113.48 yesterday.

Investors are switching their attention to the outcome of the Fed's two-day policy meeting, which began today.

The central bank's Federal Open Market Committee (FOMC) is widely expected to announce tomorrow that it will maintain ultra-low interest rates to support the recovery.

Chairman Ben Bernanke will hold his first post-FOMC press conference, the first for any Fed chairman.

The Fed's top policy panel will weigh whether the economic recovery can sustain itself with less central bank stimulus.

The FOMC is expected to lower its growth forecasts during the meeting.

In addition, traders were also awaiting Thursday's publication of US gross domestic product (GDP) data for the first three months of 2011, which is key to future energy demand in the world's biggest economy.

The rate call and GDP data are crucial for the global energy market because the United States is the world's biggest oil-consuming nation.

At the same time, analysts said that unrest in the Arab world would keep price levels high.