Oil prices mixed in Asian trade

Oil prices were mixed in Asian trade Wednesday as fears over the eurozone debt crisis returned to haunt the markets after a rebound the previous day.

Investors were also anticipating the results of a meeting of the US central bank's top policymakers on further measures to perk up the world's biggest economy and oil consumer.

Weakness in the US and Europe -- two of the world's major economic growth engines -- has been weighing down on global markets.

New York's main contract, WTI light sweet crude for October delivery, was down 28 cents at $86.64 a barrel in afternoon Asian trade, but Brent North Sea crude for November turned higher by two cents to $110.56.

Prices had bounced back overnight although traders continue to be nagged by persistent concerns over a possible debt default by Greece, which could send shockwaves across global financial markets.

Greece on Tuesday sought to convince the EU and IMF that its economic programme is back on track to unlock eight billion euros ($11 billion) in rescue funding needed to prevent it running out of cash next month.

"Nervousness is running high given the uncertainty surrounding the release of the next tranche of money for Greece (which is) still part of the first bailout package," DBS Bank said.

"Latest signs are that Greece would announce further structural reforms and reductions to the size of its bloated public sector in exchange for the next tranche and more time to implement austerity."

A downgrade by Standard & Poor's of Italy's sovereign debt rating Tuesday worsened the jitters as management of contagion from Greece will depend largely on the strength of its neighbours' economies.

Other analysts said investors were waiting for results of a meeting by the US central bank's Federal Open Market Committee, amid expectations it will offer some new stimulus for the sagging US economy.

"Given the weakness of the incoming economic data, the Fed is now almost certain to do something, but exactly what is still not entirely clear," research house Capital Economics said.

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Source : AFP