Oil prices dip ahead of Fed, ECB meeting

Oil prices drifted lower Monday as markets awaited US and European central bank meetings later this week amid hopes for fresh economic stimulus.New Yorks main contract, light sweet crude for September, finished at $89.78 a barrel, down 35 cents from Fridays closing level.In London trade, Brent North Sea crude for delivery in September fell 27 cents to $106.20 a barrel.Markets were looking ahead to monetary policy meetings of the Federal Reserve, European Central Bank and Bank of England to see if they would announce more stimulus, particularly in the form of asset purchases known as quantitative easing.Traders have taken to the sidelines ahead of the potential later in the week for decisions on stimulus from the ECB and the Fed, said Addison Armstrong at Tradition EnergyThe Feds two-day meeting ends Wednesday and the ECB and BofE meetings are on Thursday.With the main focus this week being the central bank meetings out of Europe and the US, and much QE potentially already priced in to the market, there seems to be a fairly large amount of downside risk for most asset classes this week, said IG Markets analyst Jason Hughes.Major central banks have used QE -- a policy of creating new cash to boost lending among commercial banks -- for the past few years as the global economy struggles to recover from the 2008 financial crisis.ECB president Mario Draghi on Thursday pledged to do whatever it takes to preserve the European single currency in comments that sent markets soaring.Barclays analysts warned that market expectations appear to be high and any disappointment at Thursdays meeting is likely to be met with an aggressive reversal in the risk asset rally.Oil futures prices fell last week as concerns over the eurozone sovereign debt crisis overshadowed Middle East supply worries and positive economic data out of resource-hungry China.