Brent oil edged higher toward $93 ahead of several global interest-rate decisions that are expected to see further monetary tightening.
The Fed and other central banks from Europe to Asia are expected to deliver interest-rate hikes this week as they seek to tame rampant inflation that’s taken a toll on demand. Brent futures rose by almost 1 per cent Tuesday and remain within the $10 band in which they have fluctuated this month.
Crude has lost about a third of its value since early June, erasing all the gains made in the wake of Russia’s invasion of Ukraine, as concerns about a global slowdown weighed on demand. Liquidity also thinned, leading to volatile price swings, while a stronger dollar has added to headwinds.
The whole market waits for how hawkish the Fed meeting will be,” said Keshav Lohiya, founder of consultant Oilytics. “Risk-on assets continue to remain on edge.”
The potential for increased supply has weighed on the outlook. The US said Monday it would offer an additional 10 million barrels of oil from its strategic reserves in November, ahead of plans by the European Union to ban Russian crude in December. Austria also plans to release 60,000 tons of diesel from its reserves amid a local refinery outage.
- WTI for October delivery, which expires Tuesday, rose slightly to $86.19 a barrel.
- The more-active November contract climbed to $85.62 at 10:18 a.m. in London.
- Brent for November settlement rose 0.6 per cent to $92.54 a barrel.
Investors also are weighing the prospect of higher Iranian crude flows should protracted talks on reviving a nuclear deal reach a conclusion. Discussions on efforts to resurrect an accord on the sidelines of the United Nations General Assembly in New York are “a possibility,” Foreign Ministry spokesman Nasser Kanaani said at a press conference.
The United Arab Emirates is accelerating plans to raise its oil production capacity, according to people familiar with the matter. Abu Dhabi National Oil Co., which pumps almost all the UAE’s oil, wants to be able to produce 5 million barrels a day by 2025.
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