Brent Steady Ahead of Bernanke's Press Conference
Brent crude oil held steadily above $106 on Wednesday morning as all eyes remained on the US Federal Reserve's policy meeting. The commodity traded at $106.32 at 9:09 GMT as the second and final day of the Fed's meeting began.
After the bank's Chairman, Ben Bernanke, indicated that the bank was considering tapering off its $85 billion per month stimulus program, investors desperately scoured US economic indicators for clues about the bank's intentions. Most are expecting Bernanke to address speculation about when the bank will cut back on its quantitative easing at the press conference following the meeting.
He is likely to provide more detail about the bank's timeline for tapering off the stimulus spending. He is also expected to underscore the fact that reeling in the stimulus program is not the same as budget tightening in an effort to calm markets. Bernanke and his colleagues will be working hard to keep from surprising the markets which could lead to volatile trading.
According to Reuters, polls show that analysts are expecting to see the Fed start cutting back the bond buying program in the second half of 2013. Brent has been buoyed by the escalating Syrian civil war recently, which has now grown into a larger issue between the US and Russia. As world leaders work to organize an international peace conference, the divide between Russia and the West has become more evident. Several world leaders have been working to convince Russian officials to ease up on their support of Syrian President Bashar al-Assad, but so far there has been no progress and no peace talks are expected before August. Despite that news, many believe that the Syrian conflict won't support Brent prices much longer. Without the war spilling into oil rich neighboring countries, lackluster global demand will likely take over and drive prices down.
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