Brent crude futures remained steady above $90 per barrel on Tuesday as investors kept an eye on forthcoming macroeconomic data. These figures could provide insights into whether the United States and Europe will implement further interest rate hikes.
At 0630 GMT, November Brent crude futures showed a modest increase of 22 cents to reach $90.86 per barrel, while U.S. West Texas Intermediate crude futures for October inched up by 29 cents to reach $87.58.
The recent rise in Brent crude to $90 a barrel occurred after Saudi Arabia and Russia announced an extension of voluntary supply cuts amounting to 1.3 million barrels per day (bpd) until the year’s end, marking the first time the price reached this level in 10 months.
Market analysts are closely watching the release of August U.S. consumer price index data on Wednesday, as this could determine the future course of interest rates in the world’s largest economy and the largest oil consumer.
While the Federal Reserve is widely expected to maintain its current interest rates at an upcoming policy meeting, there is uncertainty regarding whether the Fed will choose to hike rates or maintain the status quo in November.
Tina Teng, a markets analyst at CMC, emphasized that the medium-term outlook for oil remains bullish, with China reporting improved economic data. Teng also noted that the OPEC+ output cuts are a key factor bolstering the market’s upward momentum.
Oil markets are also closely watching the European Central Bank’s interest rate decision, which will be announced on Thursday. The European Commission recently revised its growth forecast for the eurozone, predicting slower growth in 2023 and 2024 than previously anticipated.
Investors are also anticipating industry data on U.S. crude stocks, expected to be released at 2030 GMT on Tuesday. Preliminary Reuters polling suggests that crude inventories may have declined by approximately 2 million barrels during the week ending September 8.
Additionally, the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) will release their monthly reports this week. The IEA lowered its 2024 oil demand growth forecast to 1 million bpd in August, citing sluggish macroeconomic conditions, while OPEC maintained its 2.25 million bpd demand growth forecast for 2024 in its August report.
