Oil dips as investors focus on Fed's stimulus

Oil Edges Lower for A Second Session With Focus on Fed Stimulus.

Bloomberg - Oil dipped during the opening of trading in Asia as investors turned their attention to a Federal Reserve meeting this week that s expected to signal moving toward scaling back stimulus.

Futures in New York for a second session slipped toward $71 per barrel. The Fed is poised to start laying the groundwork for stopping monthly asset purchases when they meet for two days from Tuesday, according to a Bloomberg poll of economists. The dollar held a two-day advance, making commodities priced in the currency such as oil less attractive for investors.

Oil still closed a fourth weekly advance on Friday, with prices clawing back gains after an interruption by the sweeping spread of delta variant of the virus that raised concerns about the demand outlook. The global market grew with the focus also shifting to the energy crunch which is playing out worldwide, which could increase demand for crude.

Energy prices have rallied globally, as economies emerge from the pandemic, especially natural gas, which has brought the prospect of fuel switching. There are expectations that diesel demand will increase in Asia during winter, while the use of oil to generate power in the U.S. may move upward.

Also: Winter is coming and Europe Is Running Low On Gas?

The cost-earlier timespread for Brent was 78 cents a barrel in backwardation - a bullish structure where near-dated contracts are more expensive than those further out. That compares with 61 cents a week earlier.