High oil price harming economic growth: IEA

High oil price harming economic growth: IEA Published on Thu, Apr 07, 2011  | Source : Reuters

Crude prices traded flat but heating oil climbed slightly as cautious traders awaited today’s history-making press conference with the Federal Reserve chairman. Investors were also wary ahead of this morning’s release of weekly Department of Energy figures. They are expected to show an increase in US crude and distillate reserves but another big fall in gasoline stocks.

Crude settled down 0.06 percent at $112.21 on Tuesday at the NYMEX but heating oil gained slightly to finish up 0.9 percent. Traders are awaiting the outcome of the Federal Open Market Committee meeting and a scheduled news conference this afternoon by Fed Chairman Ben Bernanke. Investors anticipate an extension of the Fed’s fiscal stimulus policy. It has seen lending at near-zero interest rates in a bid to stimulate the economy. But critics argue this has flooded the market with easy money, weakened the dollar and helped boost oil and commodity prices.

The dollar fell yesterday to a three-year low, helping to support oil prices and offset the expected rise in oil inventories. Oil was also buoyed by refinery outages in Texas, positive corporate earnings reports in the US and continuing instability and violence in North Africa and the Middle East.

As motorists pay near record prices at the pump, big oil companies are expected to unveil massive profits this week. President Barack Obama yesterday called for an end to oil company subsidies and warned spiraling prices could choke the US economic recovery.