Brent January crude futures rebounded by 36 cents, or 0.4%, reaching $85.38 per barrel as of 0040 GMT, following a decline of $1.33 the previous day. Meanwhile, Brent December futures concluded 4 cents lower at $87.41 per barrel upon contract expiration on Tuesday.
U.S. West Texas Intermediate crude futures registered a gain of 28 cents, or 0.3%, climbing to $81.30 per barrel after a decrease of $1.29 in the preceding session.
Edward Moya, senior market analyst at OANDA, noted, “Crude prices are stabilizing in anticipation of a significant update from the Treasury and the FOMC rate decision,” referring to the Federal Open Market Committee that dictates U.S. monetary policy. He added, “Geopolitical risks persist, offsetting the surge in U.S. production.”
Market sources, citing American Petroleum Institute figures, reported a rise of approximately 1.3 million barrels in crude oil inventories last week, while fuel stockpiles declined by roughly 360,000 barrels on Tuesday.
The impact of interest rate adjustments on inflation control and oil demand is acknowledged, with rate hikes potentially curbing economic growth and oil consumption, while rate cuts could encourage higher oil usage. The Federal Reserve, concluding its meeting on Wednesday, is expected to maintain stable interest rates, as indicated by a CME Fedwatch tool poll.
In Europe, a Eurostat flash reading revealed that October inflation in the Eurozone dropped to 2.9%, its lowest level in two years, down from 4.3% in September. This development implies that the European Central Bank is unlikely to implement interest rate hikes in the near future. The Bank of England will convene on Thursday.
Additionally, Goldman Sachs analysts predict that Brent prices may reach $100 per barrel by June as stocks gradually deplete. They also noted that while the market is currently tightening at a measured pace, it may become significantly tighter in the distant future. However, the course of productivity and oil demand trends will play crucial roles in this scenario.
