Oil prices are declining after rising about 4% in the previous two sessions.
“The market has taken a breather ahead of the Fed meeting,” believes Saxo Capital Markets Pte analyst Charu Chanana. She notes, however, that oil prices continue to be supported by factors such as lower production in Russia and a projected rise in fuel demand in China, Bloomberg reported.
Deputy Prime Minister Alexander Novak said on Tuesday that Russia will extend the decision to reduce oil production by 500 thousand barrels per day until June 2023. In early February it was announced that in response to the introduction of the “ceiling” on oil prices from March its production will be reduced.
Quotes for May futures for Brent at London’s ICE Futures Exchange totaled $75 per barrel as of 7:09 a.m., down $0.32 (0.4%) from the close of the previous session. Those contracts rose $1.53 (2.1%) to $75.32 a barrel on Tuesday.
The price of WTI futures for May oil on the electronic trading on NYMEX fell by $0.33 (0.5%) to $69.34 per barrel on Wednesday morning. The contract value grew by $1.85 (2.7%) to $69.67 a barrel at the end of previous session.
The U.S. Federal Reserve’s March meeting will be held amid heightened uncertainty as banking problems added to high inflation and low unemployment, analysts said.
The consensus forecast calls for a 25-basis-point hike in the benchmark rate. Rate futures quotes suggest that traders see about an 83% chance of such a move. At the same time, many economists, including representatives of leading Wall Street banks, withdrew their forecasts for a rate hike and now believe that the Fed will take a pause and not change the cost of borrowing.
