Oil prices fall before Fed meeting

21st September 2010, Comments 0 comments

Oil prices prices fell on Tuesday as traders awaited a key monetary policy meeting in the United States, the world's largest energy consuming nation.

New York's main contract, light sweet crude for delivery in October, dropped 62 cents to 74.24 dollars a barrel.

Brent North Sea crude for November delivery eased 11 cents to 79.21 dollars in afternoon London trade.

"We see prices edging down ahead of the FOMC (Federal Open Market Committee) meeting," said Ong Yi Ling, an analyst for Phillip Capital.

"We are still seeing lingering worries on the US economy," Ong said as data released on Monday failed to show an increase in US home builder confidence levels in September.

On Tuesday meanwhile, Russia and China agreed to invest five billion dollars in the construction of a refinery in the energy-hungry Asian country.

Rosneft, Russia's biggest producer of crude, and China National Petroleum Corporation (CNPC) agreed to build a new, 13-million-tonne per year refinery in Tianjin, a port city near Beijing.

Russia will own 49 percent in the project and China 51 percent.

Elsewhere, Cairn Energy, renowned for a major oil find in India, said it had discovered pockets of oil and further evidence of gas in offshore Greenland.

The British group said it had found two types of oil after drilling in the Baffin Bay Basin.

"The presence of both oil and gas confirms an active, working petroleum system in the basin and is extremely encouraging at this very early stage of our exploration campaign," Cairn chief executive Bill Gammell said in a statement.

© 2010 AFP

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