Oil falls below $98 on plentiful supply

WILLISTON, ND - JULY 22: A pumpjack is seen on July 22, 2013 outside Williston, North Dakota. Pumpjacks are used to mechanically pump oil and natural gas out of the earth when there is not enough natural pressure for the liquids to rise on their own. North Dakota has been experiencing an oil boom recently, brining tens of thousands of jobs to the region, lowering state unemployment and bringing a surplus to the state budget. (Photo by Andrew Burton/Getty Images)
Andrew Burton

LONDON The price of oil extended losses Wednesday on expectations U.S. crude stockpiles rose again last week because of muted demand. Markets also awaited the outcome of the U.S. Federal Reserve's policy meeting.

Benchmark U.S. crude for December delivery was down 93 cents at $97.27 a barrel at midday European time in electronic trading on the New York Mercantile Exchange. The contract dropped 48 cents on Tuesday and is down about 4 percent in October.

Energy Department data due Wednesday for the week ended Oct. 25 is expected to show increases of 3.5 million barrels in crude oil stocks and 1.5 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

U.S. crude supplies rose 21.5 million barrels in the four weeks ended Oct. 18, to levels nearly 10 percent above the five-year average.

"Bad economy means bad oil prices. There's not much more to understanding the way oil moves outside of that in America," said Carl Larry of Oil Outlooks and Opinions.

The market is also waiting for Wednesday's outcome of a two-day Federal Reserve policy meeting. The Fed is expected to reinforce expectations that it won't begin reducing its mammoth monetary stimulus until next year.

Brent crude, a benchmark for international crude also used by U.S. refineries, was up 41 cents to $109.42 on the ICE exchange in London.

In other energy futures trading on Nymex:

- Wholesale gasoline rose 0.9 cents to $2.601 a gallon.

- Heating oil rose 0.1 cents to $2.976 a gallon.

- Natural gas fell 0.2 cents to $3.627 per 1,000 cubic feet.