Monday, June 17, 2024

Oil rises ahead of US Federal Reserve meeting amid continuing war on Gaza

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Oil rises ahead of US Federal Reserve meeting amid continuing war on Gaza

Oil prices rose in early Asian trade on Wednesday ahead of meetings of major global central banks this week, including the Federal Reserve, while the market closely watched developments in the Israeli war on Gaza.

By 03:30 GMT, Brent crude futures for January delivery were up 0.3%, or 28 cents, at $85.30 a barrel, after falling more than 1% on Tuesday.

Brent crude for December fell four cents to settle at $87.41 a barrel after the contract ended on Tuesday.

US West Texas Intermediate crude futures rose 0.2%, or 16 cents, to $81.02 a barrel, after losing about 1.6% in the previous session.

Oanda’s chief market analyst, Edward Moya, said, “Crude prices will stabilize ahead of…the interest rate decision by the Federal Open Market Committee,” the group that sets the direction of US monetary policy.

He added: “There are geopolitical risks and this appears to be offsetting the impact of record production levels from the US.”

U.S. crude oil inventories rose by about 1.3 million barrels last week, while fuel stockpiles fell by about 360,000 barrels and distillate inventories fell by about 2.5 million, market sources said Tuesday, citing data from the American Petroleum Institute. Barrels.

Raising interest rates to control inflation may slow economic growth and reduce oil demand, while lowering interest rates to stimulate spending may lead to increased oil consumption.

The U.S. Federal Reserve, which ends its meeting on Wednesday, is expected to keep interest rates steady, according to a survey by CME FeedWatch.

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In Europe, inflation in the euro zone hit its lowest level in two years in October, falling to 2.9% from 4.3% in September, according to a preliminary reading from the European Union’s statistics office (Eurostat), which led to deflated expectations. The rise of the European Central Bank. Interest rates are due soon and the Bank of England will meet tomorrow on Thursday.

Factory activity in China unexpectedly contracted in October, a special survey showed on Wednesday, after pessimistic official figures released earlier in the day raised questions about a weak economic recovery at the start of the fourth quarter. China is the world’s largest oil importer.

(Reuters)

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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