Crude oil down again ahead of Fed meeting

21 September 2010

Written by John King

Crude oil prices were falling towards $74 a barrel in electronic trading on the New York Mercantile Exchange (Nymex) this morning (September 21st) as traders displayed caution ahead of an upcoming Federal Reserve statement.

After rallying 1.6 yesterday, crude futures were once more under pressure in the Asian trading session, resuming last week's downward trend as traders awaited the Fed's latest policy decision.

There is pressure for the central bank to introduce fresh economic stimulus, but many analysts expect the committee to tread water this month.

The commodity also saw selling pressure as the front-month contract for October delivery approached expiry on the Nymex.

Speaking to Bloomberg, Ken Hasegawa, a commodity derivative sales manager at broker Newedge in Tokyo, explained: "Only the front month, or October contract, is very weak. Traders want to see the next month contract and that is unchanged."

Indeed, the November-delivery contract is trading only fractionally lower above $76 a barrel, while heating oil prices are also virtually unchanged at $2.1248 a gallon.

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