Oil investors expect OPEC and Fed meeting
2023.01.30 01:46
Oil investors expect OPEC and Fed meeting
By Ray Johnson
Budrigannews.com – Oil prices fell on Monday, giving up earlier gains, as investors are cautious ahead of a meeting of the U.S. Federal Reserve that could cause market volatility and global producers are likely to keep output the same during this week’s meeting.
By 04:35 GMT, futures were down 20 cents, or 0.2 percent, to $86.46 a barrel, while U.S. West Texas Intermediate crude was down 11 cents, or 0.1 percent, to $79.57 a barrel.
When they meet virtually on February 1, ministers from the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, known as OPEC+, are unlikely to alter their current oil output policy.
However, Brent and WTI experienced their first weekly loss in three weeks last week as a result of an indication of an increase in crude exports from Russia’s Baltic ports at the beginning of February.
National Australia Bank (OTC:) stated:
“We expect outlook commentary from the U.S. Fed to be the key driver of the outlook in the near term.” “No change to the OPEC+ output is expected to be announced at this week’s meeting.” in a research note by analysts.”
Prior to the policy meeting of the Federal Reserve that is scheduled for January 31-February. 1. The market generally anticipates that the U.S. central bank will reduce the number of rate hikes it makes to 25 basis points (bps) instead of the 50 bps it announced in December. This may lessen concerns that an economic slowdown would reduce fuel demand in the world’s largest oil consumer.
Oil prices earlier increased as a result of tensions in the Middle East as a result of a drone attack on Iran, an oil producer, and China’s pledge over the weekend to promote a consumption recovery that would support fuel demand.
Stefano Grasso, a senior portfolio manager at 8VantEdge in Singapore, stated:
“It is not really clear yet what is happening in Iran, but any escalation there has the potential to disrupt crude flow.”
“China and Russia are on the demand side, and Russia is on the supply side. “Grasso, who was previously an oil trader for Eni in Italy, stated that both can swing by more than 1 million barrels per day above or below expectation.”
“Russia has surprised in terms of the resilience of export volume despite the sanctions,” while “China seems to have surprised the market in terms of how quickly they are coming out of zero COVID.”
This week, China resumes business following its Lunar New Year celebrations. Citing data from the Ministry of Transport, Citi analysts said in a note that the number of passengers traveling prior to the holidays rose above levels in the previous two years but is still below 2019.
According to the Citi note, “Overall international traffic recovery remains gradual, with high single digits to low teens to 2019 level,” and “We expect further recovery when outbound tour group travel resumes on Feb. 6.”
