The price of oil inched up to around $97 a barrel Monday but gains were tempered by the prospect of a further reduction in U.S. central bank stimulus and stock market headwinds.
By early afternoon in Europe, benchmark U.S. crude for March delivery was up 39 cents at $97.03 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the Nymex contract fell 68 cents to settle at $96.64.
Oil prices advanced despite slumping global equity markets and significant weakness among emerging-market currencies.
"The resistance of oil prices is remarkable given that the emerging economies were responsible for the surge in oil demand in recent years and look set to be behind any growth in oil demand this year, too," said a note to clients from analysts at Commerzbank in Frankfurt. "It is thus questionable whether oil prices will be able to ignore the headwind in the long term if the weakness prevails in the emerging economies."
The Federal Reserve meets for two days from Tuesday. Officials are widely expected to reduce the central bank's monthly bond buying that has underpinned an economic recovery.
So far, the reduction has been minimal. The Fed has cut the amount of bonds it buys each month by $10 billion to $75 billion but many economists think the stimulus could end this year if the U.S. economic recovery gains steam.
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