Oil prices at new low amid market uncertainty

Benchmark oil prices fell below $84 a barrel in Singapore today. In London trading on Tuesday, Brent oil dropped for the third day and hit an almost 17-month low on speculation that US supplies may have shrunk less than estimated. Investors are also awaiting the outcome of a US Federal Reserve meeting on monetary today.

Benchmark oil for July delivery was down 45 cents to $83.58 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 76 cents to settle at $84.03 in New York on Tuesday.

In London, Brent crude for August delivery was down 75 cents at $95.01 per barrel on the ICE Futures exchange.

Expectations are that the Federal Reserve policy meeting may result in stimulus for the world's largest economy. However this failed to halt the slide in Brent, which has tumbled 22 per cent this quarter, its biggest fall since late 2008.

The US central bank will release a policy statement at the end of its two-day meeting this evening, followed by a briefing by Fed chairman Ben Bernanke.

The market is also awaiting an inventory report from the US Energy Information Administration later today for trading cues. Oil prices could be supported by a projected drop in US crude oil stockpiles for a third straight week.

Analysts say the market seems well-supplied with oil, and traders were not focusing on supply disruption risks posed by sanctions on key producer Iran.