Oil prices stay the same because the possibility of Fed rate hikes may slow down fuel demand.
Brent crude futures for November settlement fell 7 cents
SINGAPORE The oil prices were not much changed on Tuesday after rising during the previous session because of concerns that the rate of interest rises across the United States to tame inflation could slow economic growth and boost appetite in the largest crude consumer.
Brent crude futures for the November settlement dropped 7 cents, or 0.1 percent and were at $91.93 per barrel by 0136 GMT.
U.S. West Texas Intermediate crude for the October delivery was $85.59 per barrel, which is down 14 cents or 0.2 percent. The contract for October expires on Tuesday. The more active contract for November was $85.20 with a drop of 16 cents or 0.2 percent.
Related: The weak dollar and supply worries cause oil prices to go up.
The dollar gained against important currencies this morning in anticipation of a series of central bank meeting this week. They will be led by the U.S. Federal Reserve, that is expected to increase rates of interest by further 75 basis point to combat the rising rate of inflation.
A stronger greenback can make commodity that are backed by dollars more expensive to holders of other currencies.
“Crude prices were under pressure as fears of an aggressive central bank tightening are driving concerns for a quickly weakening global economy,” said Edward Moya, a senior market analyst at OANDA in a report.
“The global economy is slowing and that has been troubling for the crude demand outlook.”
U.S. crude oil stocks are believed to have increased this week by 2 million barrels over the week that ended September. 16th an initial Reuters poll on Monday showed.
The U.S. Energy Department will sell 10 million barrels from its Strategic Petroleum Reserve for delivery in November, prolonging the date of an initiative for 180 million barrels to be sold of oil from the reserve to reduce the price of fuel.
The impasse surrounding a revision to the Iran nuclear agreement continues to prevent the exports from the country from return to market and can provide some relief for prices.
Russia declared on Monday that it was still unable to resolve the issues that were raised in negotiations, as France’s foreign minister declared that it was the responsibility of Tehran to take a decision because the time for finding the solution was closing.
Yet, evidence that large producers aren’t able to meet their output targets did not cause prices to rise on Monday.
Related: Oil prices go up because of possible supply problems.
A document that was released by the Organization of Petroleum Exporting Countries and its allies, headed by Russia called OPEC+, showed the group was short of its production goal of 3.583 millions barrels of oil daily (bpd) during August. As of the month, OPEC+ missed its goal by 2.892 million barrels per day.
ANZ Research analysts did point to the lifting of the citywide restrictions in Chinese’s Chengdu as well as Dalian in the morning as an opportunity for a greater revival in the growth of oil demand in the world’s second biggest oil consumer.
