Oil nears $107 as market awaits Fed, supply data

The Associated Press

The price of oil neared $107 as traders looked ahead to the outcome of the Fed’s meeting later Wednesday and as violence persisted in energy producer Iraq.

Benchmark U.S crude for July delivery gained 58 cents to $106.94 a barrel on the New York Mercantile Exchange by midafternoon in Asia. Brent crude, a benchmark used to price international oils, added 22 cents to $113.67 a barrel on the ICE Futures exchange in London.

Markets are waiting for the conclusion to the Federal Reserve’s two-day policy meeting, when it will release its latest forecasts for the world’s biggest economy that will also provide guidance on future energy demand.

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Also scheduled for Wednesday is the latest reading on U.S. supplies, with analysts forecasting a drop of 1.4 million barrels in the week ended June 13, according to a survey by Platts.

In Iraq, troubling sectarian violence was casting a shadow over future energy supplies from the country, which has been rebuilding energy infrastructure. But the Paris-based International Energy Agency says so far the conflict has not put supply at risk.

In other energy futures trading:

— Wholesale gasoline added 0.2 cent to $3.06 a gallon.

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— Natural gas edged 0.4 cent higher to $4.713 per 1,000 cubic feet.

— Heating oil rose 0.7 cent to $3.03 a gallon.