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Oil Rises 1% Ahead of FOMC Meeting

The September crude oil delivery contract advanced 78 cents, or 1%, to settle at $81.48 a barrel on Monday.
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) -- Oil futures gained alongside equities on Monday as traders awaited Tuesday's meeting of the

Federal Open Market Committee


The September crude oil delivery contract added 78 cents, or 1%, to settle at $81.48 a barrel. Phil Flynn, energy analyst at PFGBest, said the market traded along with the major stock market averages today. But he also highlighted investors' positioning ahead of Tuesday's economic policy statement from the FOMC. Confidence about an economic lift ahead of the statement had sent prices far above $81 and just under $82 earlier in the session.

"I think we were going up on anticipation of the Fed meeting initially, but when the dollar started to rebound, it took away some bullish momentum. But I think it's still up because the stock market is up a little," Flynn said earlier.

But Flynn also noted that if the Fed stands pat rather than signal some additional stimulus measures on Tuesday, that could send the dollar higher and push oil prices below $80 a barrel.

Stocks held gains throughout Monday's session with the

Dow Jones Industrial Average

finishing 45 points to 10,699. Shares of blue-chip components


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Exxon Mobil

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were followed the rest of the average higher, each adding 0.7%.

The NYSE Arca Oil index was gained 0.6%, though the Philadelphia Oil Service Sector index shed 0.3%.

Over the weekend,

The Associated Press

reported that


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cement plug had hardened in its massive Gulf leak, giving BP the chance to finish drilling a relief well. The stock, however, lost 1.1%, to $40.86.

Elsewhere on the Nymex, the September natural gas contract declined by 16 cents, or 3.5%, to settle at $4.31 per million British thermal units. September heating oil added nearly a penny, or 0.3% to settle at $2.15 a gallon, and September gasoline also gained nearly a penny, or 0.3%, to settle at $2.12 a gallon.

--Written by Sung Moss and Melinda Peer in New York