Oil rises ahead of the US Central Bank meeting amid the continuation of the war on Gaza
Oil prices rose in early Asian trading, today, Wednesday, ahead of meetings of major global central banks this week, including the Federal Reserve (the US central bank), while the market closely monitors developments in the Israeli war on Gaza.
By 03:30 GMT, Brent crude futures for January delivery rose 0.3%, or 28 cents, to $85.30 per barrel, after falling more than 1% yesterday, Tuesday.
Brent crude futures for December fell by four cents, recording at settlement $87.41 per barrel with the expiration of the contract, yesterday, Tuesday.
US West Texas Intermediate crude futures increased 0.2%, or 16 cents, to $81.02 per barrel, after losing about 1.6% in the previous session.
Oanda’s chief market analyst, Edward Moya, said, “Crude prices stabilize before… the interest rate decision from the Federal Open Market Committee,” which is the committee that determines the direction of US monetary policy.
He added: “Geopolitical risks remain, and this appears to offset some of the impact of record production levels coming from the United States.”
Market sources, citing figures from the American Petroleum Institute, said yesterday, Tuesday, that crude oil inventories in the United States rose by about 1.3 million barrels last week, while fuel inventories decreased by about 360,000 barrels, and distillate inventories decreased by about 2.5 million barrels.
Raising interest rates to curb inflation could slow economic growth and reduce demand for oil, while lowering interest rates to stimulate spending could lead to increased oil consumption.
According to a poll conducted by the CME FeedWatch tool, the US Central Bank, which will conclude its meeting today, Wednesday, is expected to keep interest rates steady.
In Europe, inflation in the euro zone reached its lowest level in two years in October, falling to 2.9% from 4.3% in September, according to a preliminary reading of the European Union Statistics Office (Eurostat), which led to expectations that ruled out a raise by the European Central Bank. Interest rates soon, and the Bank of England will meet tomorrow, Thursday.
A special survey showed on Wednesday that factory activity in China contracted unexpectedly in October, after pessimistic official figures issued the previous day, raising questions about the fragile economic recovery at the beginning of the fourth quarter. China is the world’s largest oil importer.
(Reuters)
2023-11-01 06:31:28
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