Crude oil prices inched up modestly in Asian morning trade today after ending trade on Monday with yet another loss, driven by demand concern.
As the latest Fed meeting begins today, however, eyes will be on the U.S., with most analysts expecting the central bank to announce a pause for rate hikes.
That would have a positive effect on prices although how durable that effect would be in the context of continued doubts about China’s rate of economic recovery is anyone’s guess.
At the time of writing, Brent crude was trading at over $72 per barrel, with West Texas Intermediate at close to $67.50 per barrel, both up by less than a percentage point since yesterday’s close.
West Texas Intermediate had shed 7% over the last three trading days, Bloomberg reported, dampened by demand concerns but also by the slowdown in the U.S. economy and sanction-resilient Russian crude exports.
Yet the report also noted that U.S. sour crude prices had strengthened, reaching a one-year high as the federal government signaled it may finally be ready to begin refilling the strategic petroleum reserve.
The government announced the purchase of 3 million barrels of crude last week alongside plans for the purchase of another 3 million later in the year.
"These 3 million barrels are being purchased for an average price of about $73 per barrel, lower than the average of about $95 per barrel that SPR crude was sold for in 2022, securing a good deal for taxpayers," the Department of Energy said, as quoted by Reuters, last week.
Even so, oil prices have generally remained subdued, whetting bargain-hunting appetites among traders, per Reuters.
"Some investors looked for bargains after the previous day's heavy selling while others held back their positions with speculation that Saudi Arabia may cut production additionally," a Nomura Securities economist told the news outlet.
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By Irina Slav for Oilprice.com
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