Brent futures edge down as investors await cues from OPEC+ meeting

The front-month ICE Brent contract has inched lower by $0.21/bbl on the day, to trade at $90.50/bbl at 09.00 GMT.

PHOTO: Pumpjack and flag of OPEC. Getty Images

Upward pressure:

Oil traders are looking out for fresh cues about market supply from the Joint Ministerial Monitoring Committee (JMMC) meeting convened by the members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+).

Analysts expect OPEC+ producers to continue their oil production cuts to keep supplies tight in the global market.

Moreover, OPEC’s secretary general Haitham Al Ghais told the BBC in an interview yesterday that global oil demand is expected to grow by around 2.4 million b/d in 2023.

Brent futures gained more support after the American Petroleum Institute (API) reported a drop in US crude oil stocks. US commercial crude inventories dropped by 4.21 million bbls in the week ended 29 September, according to the API data cited by Trading Economics.

Downward pressure:

The US Federal Reserve (Fed) chose to keep its interest rates unchanged at its latest meeting, but many market analysts believe that inflationary pressures could prompt the Fed to raise interest rates later this year.

US Fed officials will meet again in November to discuss monetary policy at the Federal Open Market Committee (FOMC) meeting.

“To prevent them [US Fed] from implementing a rate hike on November 1 [FOMC meeting], there must be continued evidence that core inflation is easing,” said SPI Asset Management’s managing partner Stephen Innes.

Higher interest rates increase borrowing cost for non-dollar holders, thereby hampering demand for commodities like oil.

By Aparupa Mazumder

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