Oil rises slightly as market awaits Federal Reserve rate outlook

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Oil prices inched up as investors awaited the outcome of the Fed's June meeting, key economic data from China and government data on U.S. crude stockpiles.

Both benchmarks climbed more than 3% on Tuesday on hopes of rising fuel demand after China's central bank lowered a short-term lending rate.

"It seems that the short-term hot monies are hesitant to bid prices higher due to impending key data and events such as China's industrial production, retail sales, and the housing price index for May due tomorrow, as well as today FOMC's latest dot-plot projections," said Kelvin Wong, a senior market analyst at OANDA in Singapore.will pause rate hikes amid uncertainty on both the economic outlook and the lagged effects of 10 rate hikes since March 2022.

Rate hikes strengthen the dollar, making commodities denominated in the U.S. currency more expensive for holders of other currencies, and weigh on oil prices. A pause in hikes would spur economic growth and oil demand, supporting prices.to raise interest rates again in July to 5.00% after a surprise 25 basis point increase last week.

The European Central Bank is also expected to hike interest rates by another quarter percentage point on Thursday to tame stubborn inflation. But the Bank of Japan, which will announce its plan on Friday, is expected to maintain its ultra-loose policy.

 

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Oil steadies as market awaits US Federal Reserve rate outlookOil prices inched up slightly in Asian morning trade on Wednesday as investors awaited the outcome of the U.S. Federal Reserve's June meeting, key economic data from China and government data on U.S. crude stockpiles.
Source: Reuters - 🏆 2. / 97 Read more »