Everyone is waiting for the FED’s decision this week: Oil prices stabilize before FED announcement this week
According to CNBC, oil prices remained relatively unchanged on Tuesday, following gains in the previous trading session. Investors are concerned that an increase in key interest rates in the United States will curb economic growth and boost demand in the country that is the largest consumer of crude oil.
Brent crude prices were up 19 cents, or 0.21 percent, at $92.19 a barrel, and U.S. crude futures were up 7 cents, or 0.08 percent, at $85.43 a barrel. barrel.
On Monday, the value of the dollar increased when compared to other major currencies ahead of a series of meetings being held by central banks this week. It is widely anticipated that the Federal Reserve would boost key interest rates by an additional 75 basis points in order to combat inflation.
When the dollar strengthens relative to other currencies, the price of items denominated in dollars rises relative to those priced in other currencies.
Edward Moya, a senior market analyst at OANDA, said in a note that “oil prices have been under pressure on concerns about aggressive central bank tightening, fueling fears of a rapid weakening of the global economy.” Moya made these comments in response to a question about why oil prices have been falling. The forecast for crude oil is hampered by the fact that the global economy is exhibiting signs of weakness.
According to an early poll conducted by Reuters, crude oil stocks in the United States increased by approximately 2 million barrels in the week leading up to September 16.
In November, the United States Department of Energy (Energy Department) plans to sell up to ten million barrels of oil from the Strategic Supply Reserve. This is an extension of a plan to sell 180 million barrels of oil from the stockpile in order to bring down the price of oil.
There is some support for prices as a result of the continuing impasse on the revival of the Iran nuclear deal. This impasse continues to hinder the country’s exports from fully returning to the market.