Brent slides as investors turn cautious ahead of US interest rate meet

Front-month ICE Brent has slipped $2.12/bbl lower on the day from Friday, to $86.03/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

Chinese travellers made an estimated 308 million domestic trips during the Spring Festival holiday this year, up 23.1% from 2022, according to China’s communist party-run China Daily, citing the Ministry of Culture and Tourism.

OPEC+'s Joint Ministerial Monitoring Committee is likely to recommend maintaining its current oil output policy at its meeting on 1 February, according to market experts. In October last year, OPEC+ decided to cut production by 2 million b/d from November and through 2023.

The oil market is also anticipating a shift in supply dynamics as EU sanctions on refined Russian products take effect this Sunday.

“There is ongoing concern that markets will struggle to adjust to European sanctions on oil products. TotalEnergies warned that Europe is still at risk of diesel shortages,” says ANZ commodity strategist Daniel Hynes.

Global oil and gas supermajor BP remains confident that oil will continue to “play a major role in the global energy system for the next 15-20 years”, but that the world will eventually shift focus away from fossil fuels in the long run.

Downward pressure:

“Oil prices are likely being weighed down by potential interest rate hikes in the upcoming US Federal Reserve’s meeting," Vortexa head of APAC analysis Serena Huang said according to Reuters.

“Saudi Arabia may trim prices for crude grades sold to Asia for a fourth straight month in March, amid low physical oil premiums, as oversupply worries linger despite expectations of demand recovery in China,” reports Reuters based on a survey of four refining sources.

By Konica Bhatt

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