Benchmark oil gains slightly on Wednesday morning after dropping to two-week lows the day before as the dollar strengthened ahead of a series of central bank meetings.
The cost of November futures for Brent crude on the London ICE Futures exchange by 8:13 CST on Wednesday is $90.84 per barrel, which is $0.22 (0.24%) higher than the closing price of the previous session. As a result of trading on Tuesday, these contracts fell by $1.38 (1.5%) to $90.62 per barrel.
The price of futures for WTI oil for November in electronic trading on the New York Mercantile Exchange (NYMEX) is $84.09 per barrel by this time, which is $0.15 (0.18%) higher than the final value of the previous session. By the close of the market the day before, the value of these contracts fell by $1.42 (1.7%) to $83.94 per barrel.
“A strong dollar, rising bond yields and concerns about demand amid a global economic slowdown are putting pressure on oil prices again,” said Michael Hewson, senior market analyst at CMC Markets UK. “The market is expecting rate hikes this week from the Fed, the Bank of England and Swiss National Bank”.
“Worry about the lack of supply does not provide the support for quotes, which could be expected, but it also means that we will not see a strong collapse either,” the expert added.
The Fed meeting will end on Wednesday evening, and analysts generally believe that as a result of it, the key interest rate in the United States will be increased by at least 75 basis points.
Meanwhile, data from the American Petroleum Institute (API) indicated that U.S. oil inventories rose 1 million barrels last week after rising 6 million barrels a week earlier. The official inventory report from the US Department of Energy will be released at 17:30 CST.
