Brent Ticks Up As Tension In Africa Rises
Brent crude oil rose over the weekend after Libyan oil ports remained closed, but as the Federal Reserve policy meeting drew nearer, gains were capped as taper expectations rose.
The commodity traded at $109.18 at 4:15 GMT on Monday morning as investors anxiously waited to find out what the bank has planned for the future.
Recent labor data indicated that the US' recovery was sustainable and helped strengthen the case for the Fed to taper in December. Also adding fuel to the tapering rumors was a bipartisan budget deal in Washington that could end the political budget wars for the next two years. The agreement, which many see being passed by the Senate this week, would remove much of the fiscal uncertainty that has kept the Fed from tapering in the past.
Brent found some support from rising tension in Egypt, where worries about disruptions at the Suez canal resurfaced. Reuters reported that a car bomb detonated in Ismalia and wounded more than 30 Egyptian police officers. The blast served as a reminder that the Africa nation was still on shaky ground after its recent social upheaval.
Brent found some support from news that Libyan export terminals were not reopened over the weekend as the nation's Prime Minister had promised. Protesters refused end the ongoing stand-off between the country's eastern tribes and the central government and said they would only give up their position if their demands for a portion of oil profits and more autonomy were met.
Moving forward investors will be focused on the Fed meeting for a more concrete outline of the bank's future plans. Although most are still betting that the Fed will hold off on a taper until 2014, some analysts have begun to warm to the idea of a December taper.
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