Oil rises above US$98 as US economic data, Fed policy meeting awaited

NEW YORK, N.Y. – The price of oil rose Monday as investors prepared for key U.S. economic reports and a Federal Reserve policy meeting this week.

Meanwhile, the average price for gasoline in the U.S. fell to the lowest level of the year, helped by the recent drop in oil prices.

Benchmark U.S. crude for December delivery gained 83 cents at US$98.68 a barrel on the New York Mercantile Exchange. Oil is still down $3.65 a barrel, or 3.6 per cent, for the month of October.

U.S. data releases this week include September industrial production, retail sales, inflation and consumer confidence as well as a Fed policy meeting that could reinforce expectations that the central bank won’t begin reducing its mammoth monetary stimulus until well into next year.

The expansion of the U.S. money supply is aimed at supporting economic recovery and reducing high unemployment but has also been a boon for investors in stocks and commodities. The timing of the stimulus withdrawal has become a matter of intense speculation in markets.

At the pump, the nationwide average for gas is now $3.285, the first time this year the price has fallen below $3.29. The price is about 12 cents higher than a month ago and 26 cents more than at this time last year.

In Canada, the price of gas averaged C$1.226 per litre, according to GasBuddy.com, compared with $1.242 a month ago and $1.223 a year ago.

Brent crude, a benchmark for international crude also used by U.S. refineries, rose US$2.68 to $109.61 on the ICE Futures exchange in London.

In other energy futures trading on the Nymex:

— Wholesale gasoline added four cents to $2.63 a gallon.

— Heating oil rose five cents to $2.96 a gallon.

— Natural gas fell 14 cents to $3.57 per 1,000 cubic feet.

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Pablo Gorondi in Budapest contributed to this report.

(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)