Brent steady after US Fed maintains interest rates status quo

The front-month ICE Brent contract has inched up $0.16/bbl on the day, to trade at $85.79/bbl at 09.00 GMT.

PHOTO: Silhouette of an oil pumping unit. Getty Images

Upward pressure:

Brent futures remained supported amid rising angst in the Middle East. Iran’s Supreme Leader Ayatollah Khamenei has urged neighbouring Arab countries to immediately cease essential exports including oil and food to Israel, state-owned media agency IRNA reported.

The Islamic governments "must immediately stop the [Israeli] bombing of Gaza and block the export of oil and food to the Zionist regime,” IRNA quoted Khamenei as saying.

Brent gained additional support after the US Federal Reserve (Fed) decided to keep interest rates at their current levels, at its Federal Open Market Committee (FOMC) meeting that concluded on Wednesday.

Oil investors largely anticipated that the US Fed would keep interest rates unchanged after “recent comments from Fed officials that higher long-term interest rates are tightening financial conditions reinforced the view they [Fed] are probably done [hiking rates],” said SPI Asset Management’s managing partner Stephen Innes.

Downward pressure:

Brent futures felt some downward pressure after the US Energy Information Administration (EIA) reported a growth of 773,000 bbls on the week in commercial US crude inventories, to 421.89 million bbls, on 27 October.

The weekly stock build was smaller than the 1.35 million-bbl build estimated by the American Petroleum Institute (API) on Tuesday.

Meanwhile, weak demand projections from China after an underwhelming purchasing managers’ index (PMI) figure in October have also triggered concerns about a lack of global demand growth. This has kept a lid on Brent's rise.

By Aparupa Mazumder

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