Oil below $97, dragged down by plentiful supplies

PanARMENIAN.Net - Oil extended losses below $97 a barrel Thursday, Oct 31, dragged down by plentiful supplies and the prospect of less U.S. monetary stimulus, the Associated Press reports.

Benchmark U.S. crude for December delivery was down 16 cents at $96.61 a barrel at midafternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract dropped $1.43, or 1.5 percent, to close at $96.77 on Wednesday.

The drop followed an Energy Department report which showed an increase of 4.1 million barrels in crude oil stocks last week. Over five weeks, supplies have risen by more than 25 million barrels, suggested muted demand.

The outcome of a two-day meeting of the Federal Reserve's policy committee added to the pressure on oil prices. The Fed kept its mammoth monetary stimulus in place. But the central bank's positive tone on the economy indicated that it might be prepared to slow its bond purchases by early next year, sooner than some have assumed.

The withdrawal of stimulus would result in higher interest rates and a stronger U.S. dollar, making oil more expensive for holders of other currencies.

Brent crude, a benchmark for international crude also used by U.S. refineries, was down 25 cents to $109.61 on the ICE exchange in London.