Oil prices slip after Fed stimulus decision

The price of oil slipped to under $98 Thursday after the U.S. Federal Reserve decided to start to reduce its monetary stimulus.

Benchmark U.S. crude for January delivery shed 8 cents to $97.98 a barrel in electronic trading on the New York Mercantile Exchange. The contract had gained 59 cents on Wednesday to settle at $98.06 on news of falling U.S. supplies.

Fed to ease up on stimulus program 02:49

The Federal Reserve decided to reduce its stimulus for the U.S. economy because the job market has shown steady improvement. Investors have feared such a move because Fed policies have encouraged investment in risky assets like oil.

Meanwhile, the U.S. Energy Department said Wednesday crude oil supplies fell by 2.9 million barrels last week. Supplies of distillate fuels like diesel fell, while gasoline supplies rose less than expected, helping to boost oil prices.

In London, the February contract for Brent crude, a benchmark for international oils, was down 21 cents to $109.42 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

- Wholesale gasoline prices were flat at $2.70 a gallon.

- Heating oil dropped by about 1 cent to $3.00 a gallon.

- Natural gas gained 5 cents to $4.30 per 1,000 cubic feet.

More from CBS News