Oil prices inched below $83 a barrel Tuesday in Asia as investors mull the impact possible Fed measures to boost the U.S. economy would have on crude.
Benchmark oil for November delivery was down 34 cents to $82.74 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.83 to settle at $83.08 on Monday.
Crude prices were bolstered Monday by rising U.S. equities while Asian stock markets were mixed Tuesday.
Investors expect the Federal Reserve will soon initiate a program to buy more bonds - known as quantitative easing - which would drive interest rates down.
Some analysts expect greater monetary liquidity will spur lending but also push commodity prices higher, which would temper any jump in consumer demand.
“On the one hand, additional easing may reignite GDP through increased U.S. exports and domestic consumption,” Bank of America Merrill Lynch said in a report. “But on the other, higher oil prices will act as a tax on American consumers, partly taking away the benefit of lower refinancing costs and rising asset values.”
In other Nymex trading in November contracts, heating oil fell 1.22 cents to $2.264 a gallon and gasoline dropped 0.65 cent to $2.145 a gallon. Natural gas slid 1.7 cents to $3.414 per 1,000 cubic feet.
In London, Brent crude fell 50 cents to $83.87 a barrel on the ICE Futures exchange.