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Oil prices up after US Fed meeting

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(Globalpost/GlobalPost)

Oil prices rose in Asian trade Thursday as the US Federal Reserve's view that the economy was growing modestly eased fears it would soon wind down its huge stimulus programme.

Investors were also cheered by better-than-expected US growth figures for the April-June period, fuelling hopes for a pick-up in energy demand.

New York's main contract, West Texas Intermediate for delivery in September, climbed 34 cents to $105.37 a barrel in mid-morning trade, and Brent North Sea crude for September rose 17 cents to $107.87.

After a two-day meeting, the Fed's policy committee said growth was at a "modest" pace and pledged to keep its $85 billion-a-month bond-buying programme in place for now.

"Oil prices remain supported by the US Fed's clear signal regarding retaining monetary stimulus for now," David Lennox, resource analyst at Fat Prophets in Sydney, told AFP.

Also Wednesday, Washington said gross domestic product grew 1.7 percent in April-June, above the 1.1 percent pace expected by analysts -- although it also included a steep downgrade in growth for the previous three months to 1.1 percent from 1.8 percent.

Traders are keeping an eye on China, where the official purchasing managers' index (PMI) of manufacturing activity rose to 50.3 last month from 50.1 in June, a rare piece of upbeat news from the Asian economic giant, which has been slowing for several months.

A reading below 50 indicates contraction, while anything above signals growth.

A separate survey by banking giant HSBC released soon after the official data confirmed its own preliminary findings released last week that showed its PMI at 47.7 in July, down from 48.2 in June.

However, Kenny Kan, market analyst CMC Markets in Singapore, told AFP: "The Chinese PMI data is having little impact on oil prices, investors are taking a wait-and-see approach while focusing on US economic data."

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http://www.globalpost.com/dispatch/news/afp/130801/oil-prices-after-us-fed-meeting