Oil prices flat for second day in anticipation of Fed meeting
2023.01.31 01:53
Oil prices flat for second day in anticipation of Fed meeting
By Tiffany Smith
Budrigannews.com – Optimism over China’s better-than-expected economic data was offset by caution over an upcoming Federal Reserve meeting and an OPEC decision on production in early Tuesday trade.
Data from the Chinese government showed that business activity was up, which showed that the country’s economy was clearly on the right track after it eased most of the restrictions on fighting COVID earlier in the month.
The data supported the idea that increased crude demand in 2023 will result from a Chinese economic recovery. On the back of a recovery in China, the International Energy Agency recently predicted that crude demand would reach all-time highs in 2023.
However, gains in oil prices were limited by anticipation of a slew of central bank meetings this week and worries about a supply glut in the near future. Crude markets also suffered significant losses on Monday.
by 21:03 ET (02:03 GMT), they were unchanged at $77.95 a barrel, up 0.2 percent.
On Monday, both contracts fell more than 2% as recent data indicated that Russian oil exports were anticipated to rise in spite of recent West-imposed price restrictions. Oil prices are expected to lose between 1.6% and 3.2% in January due to Monday’s losses.
Crude markets were also affected by the strength of as investors shifted their investments into the dollar in anticipation of the. Given that recent signs of resilience in the U.S. economy provide the Federal Reserve with more leeway to raise interest rates, the outlook of the central bank on monetary policy will be closely watched.
Markets remained wary of the possibility that further increases in interest rates would impede short-term demand. There is a widespread expectation that the Federal Reserve will raise interest rates by 25 basis points (bps) on Wednesday, while the and are both anticipated to raise rates by 50 bps each this week.
The Wednesday meeting of ministers from the Organization of Petroleum Exporting Countries and its allies (OPEC+) is also the topic of discussion. Although it is generally accepted that the cartel will maintain the same production rates, any actions to the contrary could alter oil prices.
