Oil steadied before the Federal Reserve’s monetary-policy decision and guidance from producer group OPEC and its allies.
West Texas Intermediate was little changed near $79 a barrel after gaining 1.3 per cent on Tuesday. While the US central bank is expected to deliver another interest-rate hike at Wednesday’s meeting, it’s likely to be just half of December’s 50-basis-point move as inflation shows signs of cooling.
Traders will also track any guidance from the Organization of Petroleum Exporting Countries and its allies including Moscow. Delegates predict that output will be held steady at a monitoring meeting on Wednesday ahead of a fresh round of curbs on Russian energy that will kick in within days.
Crude capped a third monthly loss in January, even amid optimism that China’s ending of its strict Covid Zero policy will rekindle demand in the world’s largest crude importer. While growth is picking up, weakness among manufacturers and home sales suggest the recovery isn’t yet on sure footing.
“The established trends point at continued, tepid fundamental easing,” said Norbert Ruecker, an analyst at Julius Baer. “The improved market mood has lifted prices of late, but this support should remain temporary.”
- WTI for March delivery was steady at $78.87 a barrel at 9:53 a.m. in London.
- Brent for April lost 0.1 per cent to $85.35 a barrel.
The industry-funded American Petroleum Institute, meanwhile, reported that US commercial crude inventories expanded by 6.3 million barrels last week, according to people familiar with the figures, as stockpiles of gasoline and diesel also increased. Official figures will be issued later Wednesday.
© 2023 Bloomberg L.P.