Oil hovered steadily Monday morning as traders cautiously anticipated the Federal Reserve's upcoming policy decision amid expectations of additional tapering to stimulus with the start of the year.
The battle between industrial commodities and safe havens continues, while weaker US equities and ongoing turbulence in emerging market takes its toll on risk sentiment ahead of the Fed's monthly meeting, which will be the last for outgoing Fed chairman Ben S. Bernanke, as current Vice Chair Janet Yellen prepares to take over amid expectations for another cut in the bank's stimulus program.
WTI Crude for March's delivery fell 0.13% to $96.98 an ounce as of 08:33 GMT, while futures has so far traded in a rangebound between $96.60 and $97.15, compared with the day's open at $97.08.
Renewed concerns of economic recovery is casting its shadows again on the commodities market, and especially industrials, after data showed Chinese manufacturing probably contracted in Janaury for the first time in six months.
The main focus will be on the Fed's upcoming announcement, while signs of weakness in China's economy added to speculation that stimulus curbs by the Federal Reserve will cut demand.
US crude inventories expanded by 990 thousand barrle to 351.2 millio, halting seven consecutive weeks of declines, the Energy Information Administration (EIA) said on Friday.