Oil prices rise as market awaits Fed

Global oil prices rose Thursday, but held under recent peaks, as traders awaited the outcome of the Federal Reserve's latest regular meeting and eyed geopolitical tensions. Brent North Sea crude for delivery in October gained 17 cents to $116.13 a barrel in late morning deals. New York's main contract, West Texas Intermediate (WTI) or light sweet crude for October added 14 cents to $97.15 a barrel. Later on Thursday, the Federal Reserve will unveil the outcome of its latest monetary policy meeting, with speculation mounting over fresh stimulus measures or quantitative easing (QE). Analysts said the US central bank's Federal Open Market Committee (FOMC) would likely find the economic outlook too weak to continue putting off action to stimulate growth in the world's biggest oil-consuming nation. "Our guess is that the FOMC will announce some measure of monetary stimulus today, especially as the most recent US jobs report featured an increase of 96,000 in non-farm payroll employment, which fell short of market expectations," said VTB Capital economist Neil MacKinnon. Oil also won support as the euro held close to a four-month peak above $1.29. A weaker greenback makes dollar-priced oil cheaper for buyers using stronger currencies, boosting demand. Crude futures were also gaining from simmering geopolitical tensions after the killing of the US ambassador to Libya. Analysts said the death of Chris Stevens, from smoke inhalation after becoming trapped in the US consulate in Benghazi during an attack, sparked renewed concerns over geopolitical risks in the crude-producing region. Crude futures had rebounded in intra-day deals on Wednesday after Germany's top court approved the eurozone's bailout fund and fiscal pact, sending the euro racing to a four-month peak at $1.2937. Brent had surged to $116.67 -- touching the highest point since May 3 -- and WTI soared to $98.06, reaching a level last witnessed on August 23. However signs of weaker demand for energy in the United States put a cap on gains, analysts said. The US government's Energy Information Administration said on Wednesday that the country's crude oil stockpiles rose by two million barrels in the week ending September 7, confounding expectations for a sharp decline.