Oil rises slightly as market awaits US Federal Reserve rate outlook Business

Houston/Beijing, June 14 (BNA): Oil prices rose slightly on Wednesday as investors awaited the outcome of the US Federal Reserve meeting in June, key economic data from China and government data on US crude inventories.

Brent crude futures rose 32 cents, or 0.4 percent, to $74.61 a barrel by 0610 GMT. The price of US West Texas Intermediate crude was at $69.64 a barrel, up 22 cents, or 0.3%, Reuters reported.

Both benchmarks rose more than 3% on Tuesday on hopes of boosting fuel demand after China’s central bank cut its short-term lending rate.

“Short-term hot money (speculators) seem reluctant to push prices higher due to imminent key data and events such as China’s industrial production, retail sales, May housing price index due tomorrow, as well as today’s FOMC,” said Kelvin Wong, senior market analyst at OANDA in Singapore. , “latest point projections”.

Market participants expect that the Federal Open Market Committee (FOMC) of the US central bank will pause interest rate hikes amid uncertainty over both the economic outlook and the delayed effects of the 10 rate hikes since March 2022.

Raising interest rates strengthens the dollar, making commodities denominated in the US currency more expensive for holders of other currencies, and affects oil prices. Halting the increases would stimulate economic growth and demand for oil, and support prices.

Economists expect the Bank of Canada to raise interest rates again in July to 5.00% after a surprising 25 basis point increase last week.

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

On the supply side, US crude oil inventories rose by about 1 million barrels in the week ending June 9, according to market sources citing American Petroleum Institute figures, contrary to an average estimate of a decline of 500,000 barrels from analysts polled by Reuters.

Government data on inventories is due later in the day.

Meanwhile, OPEC+ has given Russia a slightly higher baseline for oil production, meaning Russia can produce more under the latest quotas than previously agreed.

MI