Oil price down on Fed stimulus speculation

<p>Speculation the Federal Reserve may taper monetary policy has hit oil prices.</p>

Oil prices were down in the US yesterday (November 18th) after speculation grew that the Federal Reserve is ready to start tapering its quantitative easing programme.

The Thomson Reuters/Core Commodity CRB index dropped by around 0.5 per cent, while corn fell to a three-year low and copper slipped close to a three-month low.

William Dudley, president of the Federal Reserve Bank of New York, suggested he was "getting more hopeful" about the US economic recovery, reports Reuters.

This led to claims monetary policy could be changed in the US in the coming weeks and this also hurt the Nikkei today, which fell by 0.3 per cent from yesterday's six-month high.

Investors are growing cautious as the Fed's growing optimism over the state of the US economy has led to fears its bond-buying programme could start being wound down in the near future.

However, incoming Federal Reserve chairman Janet Yellen recently noted the current monetary policy is likely to remain in place for now.

Ms Yellen won the backing of US president Barack Obama to take over from Ben Bernanke in the role.

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