Oil Continues To Be Below $80 A Barrel (SCO, DBO)

Oil continued to be below $80 a barrel on Tuesday. U.S. crude for delivery in April rose slightly by $0.15 to $79.95 a barrel, while Brent crude for delivery in April fell by $0.13 to $78.02 a barrel, in trading on Tuesday.

On Monday, oil prices had fallen below the $80 mark for the first time since March 4. The decline in prices was mainly due to fears about tightening in China that may lead to a decline in oil demand from the country. In New York, the ProShares UltraShort DJ-UBS Crude Oil (ETF) (NYSE: SCO) closed at $13.32, while the PowerShares DB Oil Fund (ETF) (NYSE: DBO) closed at $27.09, on Monday.

The movement in oil prices comes ahead of a release of a statement on Tuesday by the Federal Reserve in which it is expected to reiterate its pledge to keep interest rates low for an extended period of time. "Tuesday may shape up to be another down day for energy, since participants may not want to get too long ahead of the Fed announcement later in the day," said Edward Meir, analyst at MF Global.

OPEC, which meets on Wednesday in Vienna, is also expected to keep output unchanged. "The market is in balance, the price is great, inventories are coming down so why should we do anything?" said Ali al-Niami , Saudi Arabia’s oil minister, on Monday. The comments echoed those made by other OPEC members Iran and Qatar. Earlier, in February, OPEC delivered just 53% of pledged output curbs it agreed on in late 2008, compared with 81% from a year ago.