Oil up in Asia ahead of Fed meeting

Oil prices were up in Asian trade on Monday as investors awaited the outcome of a Federal Reserve meeting this week, analysts said.

New York’s main contract, light sweet crude for March delivery, rose 24 cents to 89.35 dollars per barrel.

Brent North Sea crude for delivery in March was up 15 cents to 97.75 dollars.

“The Federal Reserve is expected to continue its bond purchases as the economy is likely to show modest improvement, hence the markets will react positively to it,” said Ong Yi Ling, investment analyst for Phillip Futures in Singapore.

A revamped Federal Open Market Committee — the Fed’s interest rate setting panel — will gather Tuesday and Wednesday, when members are expected to continue to unfurl a $600 billion stimulus designed to jolt the US economy out of its inertia.

Despite signs that the recovery is picking up, the Fed is expected to keep its foot on the accelerator, continuing emergency bonds purchases that prime the economy and keeping interest rates at ultra-low levels.

“It is still far too soon to go back to thinking about an exit strategy,” said Peter Ireland, a Boston College economist and former Federal Reserve adviser.

Crude prices fell for the fourth straight session Friday as sentiment took a hit from a larger-than-expected rise in US stockpiles.

US crude oil stockpiles climbed 2.6 million barrels to 335.7 million barrels in the week to January 14, according to data released last Thursday.

Analysts had initially forecast a drop of 900,000 barrels for the world’s biggest oil consumer.