Oil prices downbeat ahead of central bank meeting

AFP – World oil prices dipped on Monday as markets waited to see whether major central banks would unveil more stimulus plans aimed at supporting an ailing global economy, analysts said.

Brent North Sea crude for delivery in September fell 34 cents to $106.13 a barrel in London midday trade.

New York’s main contract, light sweet crude for September dipped six cents to $90.07.

Markets were looking ahead to monetary policy meetings due later this week from the Federal Reserve, European Central Bank and Bank of England to see if they would announce more stimulus in the form of quantitative easing (QE).

“With the main focus this week being the central bank meetings out of Europe and the US, and much QE potentially already priced in to the market, there seems to be a fairly large amount of downside risk for most asset classes this week,” said Jason Hughes from IG Markets Singapore.

Major central banks have used QE — a means of creating new cash to boost lending among commercial banks — for the past few years as the global economy struggles to recover from the 2008 financial crisis.

World oil prices fell last week as concerns over the eurozone debt crisis offset Middle East supply worries and positive economic data out of raw materials-hungry China.

European Central Bank president Mario Draghi on Thursday pledged to “do whatever it takes” to preserve the European single currency — providing some support to the markets.

That message was reinforced by German Chancellor Angela Merkel and French President Francois Hollande who vowed in a joint statement to do “everything to protect the eurozone.”

Source: http://sg.finance.yahoo.com/news/oil-prices-downbeat-ahead-central-120035121.html