Oil prices fall nearly 2% on threat of further interest rate hikes and continued Russian crude flows

Oil prices stabilized at the start of Asian trading on Tuesday after falling more than 2% in the previous session on the threat of further interest rate hikes and continued Russian crude flows.

Brent crude futures gained 28 cents to $85.18 a barrel at 0155 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 9 cents to $77.99.

Investors expect the US Federal Reserve to raise interest rates by 25 basis points on Wednesday, with a half-point increase by the Bank of England and the European Central Bank the following day. Higher rates could slow the global economy and weaken demand for oil.

The market also turned its attention to a virtual meeting scheduled for February 1 at 11:00 GMT of ministers from the Organization of the Petroleum Exporting Countries (OPEC) and others, including Russia, a group known as OPEC+. .

The panel is expected to recommend keeping the group of oil producers’ current output policy unchanged when it meets this week, five OPEC+ delegates told Reuters on Monday.

OPEC+ agreed in October to cut its production target by 2 million barrels per day (bpd), or about 2% of global demand, from November to the end of 2023.

Russia continues to supply oil to the world market despite the European Union ban and G7-imposed price cap following its invasion of Ukraine, which has put pressure on prices.

Providing some support for oil prices, the US dollar index has fallen 1.3% in January so far. A weaker dollar makes rough cheaper for non-US buyers.

(Edited by : Sangam Sing)

First post: January 31, 2023 9:29 a.m. STI


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