Oil lower as investors eye Fed meeting

Agence France-Presse

Posted at Aug 10 2010 12:08 PM | Updated as of Aug 10 2010 08:08 PM

SINGAPORE - Oil fell in Asian trade Tuesday, with investor interest muted ahead of a US Federal Reserve policy meeting, analysts said.

New York's main contract, light sweet crude for September delivery, dropped 24 cents to $81.24 and Brent North Sea crude for September dropped 11 cents to $80.88.

The Federal Reserve is due to meet later Tuesday, under pressure to bolster the world's largest economy after recent disappointing data.

"It will be hard to take the Fed seriously if a more forthright acceptance of the array of softer data is not forthcoming," said Ian Shepherdson of High Frequency Economics.

The Fed is expected to downgrade its assessment of the world's largest economy, as it keeps interest rates at historic lows.

Recent data has suggested the US economy is slowing. The Labor Department reported Friday that 131,000 jobs were lost in July, far more than expected.

The United States is a major oil consumer and any weak economic data is regarded as an indicator that energy demand will be affected.

Analysts from the Commonwealth Bank of Australia said market players were expecting "the US Federal Reserve would inject another round of stimulus into the US economy".