© Reuters. An oil field in Texas in a photo from Reuters archive.
By Florence Tan and Emily Shaw
SINGAPORE (Reuters) – It fell on Monday, giving up previous gains, on expectations that the world’s top producers would keep output unchanged at a meeting this week and as investors warned ahead of a Federal Reserve meeting that could spark market volatility.
Crude futures fell 20 cents, or 0.2 percent, to 86.46 a barrel by 0435 GMT, while US West Texas Intermediate crude was $79.57 a barrel, down 11 cents, or 0.1 percent.
Ministers from the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, collectively known as OPEC+, are unlikely to adjust their current oil production policy when they hold a virtual meeting on February 1.
However, signs of rising crude exports from Russia’s Baltic ports in early February caused Brent and U.S. mediator WTI to incur their first weekly losses in three weeks last week.
“There is no expectation of an announcement of a change in OPEC + production at this week’s meeting, and we expect the expected outlook comment from the Federal Reserve to be the main driver of forecasts in the near term,” National Australia Bank analysts said in a research note.
There are widespread expectations in the markets before the US central bank’s monetary policy meeting scheduled for January 31 and February 1 that it will reduce the pace of interest rate increases to 25 basis points from the 50 it announced in December, which may ease fears of an economic slowdown that would It reduces the demand for fuel.
Oil prices rose earlier due to tension in the Middle East following the drone attack on a military factory in Iran and with China, the world’s largest crude importer, pledging at the weekend to boost consumption recovery, which will support fuel demand.
China will resume business this week after the Lunar New Year holiday. Citi analysts said in a note, citing data from China’s Ministry of Transport, that the number of passengers who took off before the holiday rose to more than the levels of two years ago, but was still below 2019 levels before the pandemic.
(Prepared by Hassan Ammar and Salma Najm for the Arabic Bulletin – Edited by Yasmine Hussein)
