SINGAPORE, Jan 30 (Portal) – Oil prices fell on Monday, giving up earlier gains, as global producers this week are likely to leave output unchanged during a meeting later this week and investors ahead of a Federal Reserve meeting that that could drive market volatility are cautious.
Brent crude futures were down 20 cents, or 0.2%, to $86.46 a barrel by 04:35 GMT, while US West Texas Intermediate crude was at $79.57 a barrel, down 11 cents or corresponds to 0.1%.
Organization of the Petroleum Exporting Countries (OPEC) ministers and allies including Russia, collectively known as OPEC+, are unlikely to tweak their current oil production policies when they meet virtually on February 1.
Still, a hint of a pick-up in crude oil exports from Russia’s Baltic ports in early February prompted Brent and WTI to post their first weekly losses in three weeks last week.
“No change in OPEC+ production is expected at this week’s meeting and we expect Fed forecast comments to be the most important factor driving the outlook in the near term,” analysts said National Australia Bank in a research note.
Ahead of the Federal Reserve’s Jan. 31-Feb , which would dampen fuel demand from the world’s largest oil consumer.
Oil prices rose earlier amid tensions in the Middle East following a drone strike on oil producer Iran and as China, the world’s largest crude oil importer, vowed over the weekend to foster a consumption recovery that would support fuel demand.
“It’s not really clear what’s happening in Iran yet, but any escalation there has the potential to disrupt the flow of crude oil,” said Stefano Grasso, senior portfolio manager at 8VantEdge in Singapore.
“We have Russia on the supply side and China on the demand side. Both can fluctuate by more than 1 million barrels a day above or below expectations,” said Grasso, a former oil trader at Italy’s Eni.
“China seems to have surprised the market at how quickly it is emerging from zero-COVID, while Russia surprised in terms of export volume resilience despite sanctions.”
China resumes business this week after the Lunar New Year holiday. The number of passengers traveling ahead of the holiday rose above levels for the past two years but is still below 2019, analysts at Citi said in a statement, citing data from the Department of Transportation.
“Overall international traffic recovery remains gradual, in the high single digits to low 10s, at levels seen in 2019, and we expect further recovery when outbound tour group travel resumes on February 6,” Citi’s statement said .
reporting by Florence Tan and Emily Chow; Edited by Muralikumar Anantharaman and Christian Schmollinger
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