US oil prices go down on Fed tapering speculation

U.S. oil prices dropped Tuesday amid speculation that the U.S. Federal Reserve will reduce stimulus measures soon. As no major economic data were published Monday, investors were looking for any hints on the Fed's tapering plans from minutes of the latest meeting of the Federal Open Market Committee, the policy setting arm of the Fed, scheduled for release Wednesday. Moreover, Central bankers and policy makers will meet in Jackson Hole, Wyoming, from Thursday to Saturday to discuss economic situation and monetary policy. Some Fed officers has indicated that the U.S. central bank is nearer to winding down its massive asset purchase programs following the improving July jobs data. Total non-farm payroll employment added 162,000 in July, well below the market expectation of 175,000. The unemployment rate edged down to 7.4 percent from 7.6 percent in June. Traders expected that the Fed will probably begin to reduce its monthly bond purchases to 75 billion U.S. dollars in September. The uncertainties of Egypt still gave some support to the oil prices. Although the Arab nation is not a major oil producer, it controls the Suez Canal and the Suez-Mediterranean Pipeline, through which a large amount of crude and refined products were shipped between the Red Sea and the Mediterranean. Light, sweet crude for September delivery lost 2.14 dollars to settle at 104.96 dollars a barrel on the New York Mercantile Exchange. Brent for October delivery, however, went up 25 cents to close at 110.15 dollars a barrel.