SINGAPORE, Aug 9 (AFP): Oil prices were steady in Asian hours Wednesday after the US Federal Reserve halted its long- running rate increases amid slowing economic growth and the market awaited the release of US energy inventories, dealers said.
At 11:50 am (0350 GMT), New York's main contract, light sweet crude for delivery in September, was up three cents to 76.34 from its close of 76.31 in the United States Tuesday.
Brent North Sea crude for September delivery was flat at 77.55 dollars.
"The market is awaiting the US inventory report," said Dariusz Kowalczyk, a Hong Kong-based investment strategist at CFC Seymour Securities, referring to the weekly energy stockpiles data released every Wednesday by the US Department of Energy (DoE).
He said that while the market expects a reduction in crude oil and gasoline inventories, the drop should not be too steep "which should result in some more decline in oil prices after the data is released."
The decision by the US central bank's Federal Open Market Committee (FOMC) to stop the cycle of interest rate increases also helped push down prices.
The FOMC Tuesday voted, with a lone dissenting voice, to keep the benchmark US cost of borrowing at 5.25 per cent. It was the first time since June 2004 that the bank has left the federal funds rate unchanged.
Kowalczyk said the Fed move confirmed the US economy was slowing down, which would mean that demand in the world's biggest energy consumer should also fall and lead to a decline in oil prices.
Oil prices however remained under pressure as UK energy giant BP scrambled to fix its oil operations in Alaska and Israel pressed its offensive against Hezabollah in Lebanon as France and the United States worked to draw up a UN resolution to stop the conflict.
BP had started shutting down operations at Prudhoe Bay that will affect 400,000 barrels a day of production while it repairs corroded pipelines.
Prudhoe Bay accounts for about half of Alaska's total output and around eight per cent of total production in the United States.
"To me, it will be a problem that will continue to underpin prices unless the pipelines are repaired. In the medium term, this will be one of the factors that will affect prices," Kowalczyk said.
Meanwhile, France said a new UN Security Council draft resolution was being prepared to halt Israel's four-week-old onslaught in Lebanon.
Security analysts fear the Israeli-Hezbollah conflict could drag the Middle East into a wider war and disrupt oil supplies from the region.