Oil prices steady ahead of Fed

Oil prices remain steady and held onto Monday’s gains as the dollar took a pause from its rally ahead of a testimony by Federal Reserve Chairman Ben Bernanke.

Investors remained on the sidelines on Tuesday which helped New York-traded oil prices trade in a range between the daily low of $96.75 a barrel and a session high of $97.23 a barrel.

On Monday on the New York Mercantile Exchange, oil rallied to a seven-week high of $97.35 a barrel.

Fed Chief Ben Bernanke’s testimony at the U.S. Joint Economic Committee and the minutes of the Fed’s most recent policy meeting are both due Wednesday, so investors are unwilling to take new positions on the dollar. The dollar tends to have an inverse relationship with commodities like oil.

Markets are closely watching for any indication that the Fed will begin to scale back its asset purchase program this year after recent economic data bolstered optimism over the economic recovery.

Oil traders also looked ahead to the release of fresh weekly information on US stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.

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