New York — Oil prices rose Tuesday as the U.S. Federal Reserve began a two-day policy meeting on interest rates.
Benchmark crude for December delivery gained $1.47 (U.S.) to settle at $79.60 a barrel Tuesday on the New York Mercantile Exchange.
The U.S. government stepped in to bail out faltering banks and other giant businesses over the past year, which has helped send the U.S. dollar tumbling and the price of oil sharply higher.
Since oil is largely bought and sold in U.S. dollars, investors holding stronger currencies can buy more crude for less and have done so in recent months, sending the price of benchmark crude above $80 near the end of October.
The central bank isn't expected to take any action on interest rates, yet statements issued after such meetings can hint at the Fed's take on the state of the economy.
“Oil is still being controlled by larger macroeconomic forces and not just demand and demand expectations,” said PFGBest analyst Phil Flynn. “The main concern is still all about what the Federal Reserve might do.”
Crude has been plentiful because the global economic slowdown has crimped demand, particularly in the United States.
Most analysts believe crude supplies in the U.S. grew again last week, and the Energy Department on Wednesday will release its weekly supply and demand figures for oil and gasoline.
In other Nymex trading, heating oil rose 2.73 cents to settle at $2.0733 a gallon. Gasoline for December delivery gained 1.32 cents to $2.0035 a gallon. Natural gas for December delivery gained 9.8 cents to settle at $4.922 per 1,000 cubic feet.
In London, Brent crude for December delivery added $1.56 to settle at $78.11 on the ICE Futures exchange.
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