2023-11-01 00:42:38
Oil prices rose slightly in early Asian trade on Wednesday ahead of key meetings of global central banks this week, including the US Federal Reserve, as the market also closely monitors the latest developments in the Israel-Hamas conflict.
January Brent oil futures rose 36 cents, or 0.4 percent, to $85.38 a barrel by 0040 GMT, following falling $1.33 on Tuesday. December Brent futures settled 4 cents lower at $87.41 a barrel as the contract expired Tuesday.
U.S. West Texas Intermediate crude futures gained 28 cents, or 0.3%, to $81.30 a barrel following losing $1.29 in the previous session.
“Crude prices are stabilizing ahead of the Treasury’s emissions update and FOMC interest rate decision,” said Edward Moya, senior market analyst at OANDA, referring to the Federal Oil and Gas Committee. Open Market which defines the direction of American monetary policy.
“Geopolitical risks remain and appear to offset record U.S. production levels. Crude oil inventories increased by regarding 1.3 million barrels last week, while fuel stocks fell by regarding 360 000 barrels, according to market sources citing figures from the American Petroleum Institute on Tuesday.
Interest rate hikes aimed at controlling inflation may slow economic growth and reduce oil demand, while rate cuts aimed at boosting spending might increase oil consumption.
The Fed, which will end its meeting on Wednesday, is expected to maintain its rates, according to a survey carried out by the CME’s Fedwatch tool.
In Europe, October inflation in the euro zone reached its lowest level in two years, falling from 4.3% in September to 2.9%, according to a quick reading from Eurostat, which suggests that the European Central Bank is unlikely to raise interest rates anytime soon.
The Bank of England will meet on Thursday.
Separately, Brent prices are expected to reach $100 a barrel by June as inventories slowly decline, Goldman Sachs analysts said in a note.
While the market is currently tightening at a moderate pace, it “might become very tight in the more distant future”, although trends in productivity and oil demand are also crucial, the analysts added.
In the Middle East, Israeli airstrikes hit a densely populated refugee camp in the Gaza Strip on Tuesday, killing at least 50 Palestinians and a Hamas commander.
US Secretary of State Antony Blinken, who will visit Israel on Friday, said the United States and other countries were studying “a whole series of possible permutations” for the future of the Gaza Strip if militants Hamas are removed from control. (Reporting by Emily Chow; Writing by Jamie Freed)
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