Oil prices drop amid Fed meeting

Oil prices fell on Tuesday as the U.S. Federal Reserve kicked off a monetary policy meeting and market speculated that the U.S. central bank will start tapering stimulus measures. Economists expected the Federal Reserve to start a small tapering of its monetary stimulus at the meeting. The Fed, which now purchases 85 billion U.S. dollars a month in Treasury bonds and mortgage-backed securities, will probably reduce monthly bond buying to 75 billion dollars, showed a Bloomberg survey released on Sept. 6. Fed Chairman Ben Bernanke will hold a press conference after the two-day meeting on Wednesday afternoon. The risk of an imminent military strike on Syria is coming down, as the United States and Russia reached an agreement which calls for Syria to account fully for its chemical weapons within a week and for the removal and destruction of its entire arsenal by mid- 2014. On the economic front, U.S. Consumer Price Index edged up 0.1 percent in August on a seasonally adjusted basis, the Labor Department said Tuesday. Excluding the volatile food and energy categories, the so-called "core" inflation index also rose 0.1 percent last month, indicating that inflationary pressure was largely absent. Following four consecutive months of improvement, U.S. builder confidence in the market for newly built, single-family homes remained unchanged in September, with a reading of 58 on the National Association of Home Builders/Wells Fargo Housing Market Index released Tuesday. Light, sweet crude for October delivery moved down 1.17 dollars to settle at 105.42 dollars a barrel on the New York Mercantile Exchange, while Brent crude for November delivery declined 1.88 dollars to close at 108.19 dollars a barrel.