June 19, 2012 - 12:51 PM
NEW YORK, N.Y. - The price of oil rose Tuesday on hopes that the Federal Reserve will announce new measures to stimulate the U.S. economy.
West Texas Intermediate crude rose by 79 cents to US$84.06 a barrel at midday on the New York Mercantile Exchange.
Brent crude, which helps set the price for oil imported into the United States, added four cents to US$96.09 in London.
The Fed holds a two-day meeting that ends Wednesday, and in the past it has taken action to encourage Americans to spend and borrow. Many analysts think the struggles of the U.S. economy and Europe's debt crisis will compel the Fed to say or unveil something to try to boost confidence.
Any sign that the Fed is willing to take action could lift oil prices, which have fallen sharply over the last six weeks amid fears that growth in the global economy will stall.
"The market is building on a little optimism that they'll do something," said Peter Donovan, an oil broker with Vantage Trading in New York.
Concerns about Iran's nuclear program also are pushing oil prices higher, Donovan said. Negotiations between six world powers and Iran — a major oil producer — appear to have accomplished little this week in Moscow. That increases the likelihood of a European oil embargo in July. And some analysts are concerned the matter will only be settled by an armed conflict in the Middle East.
Either action — an embargo or an attack on Iran — could cut into the world's supply of oil.
Even before its sudden drop, the price of oil had declined from a high this year of US$109.77 on February 24.
In other futures trading, heating oil added 2.2 cents to US$2.64 a U.S. gallon (3.79 .litres) while wholesale gasoline fell by 1.2 cents to US$2.649 a gallon. Natural gas lost 5.2 cents to US$2.583 per 1,000 cubic feet.
(TSX:ECA), (TSX:IMO), (TSX:SU), (TSX:HSE), (NYSE:BP), (NYSE:COP), (NYSE:XOM), (NYSE:CVX), (TSX:CNQ), (TSX:TLM), (TSX:COS.UN), (TSX:CVE)
News from © The Associated Press, 2012