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Wednesday, May 18, 2022

Oil prices edge higher ahead of US Fed meeting

Oil prices edged higher in Asian trade Monday as investors focused on the US Federal Reserve’s policy meeting this week for clues about its long-awaited stimulus pullback.

New York’s main contract, West Texas Intermediate (WTI) for January delivery, was up six cents at $96.66 in mid-morning trade while Brent North Sea crude for January gained 68 cents to $109.51.

“Investors mainly are waiting to hear the (Fed policy committee’s) assessment of the strength of the US economy, and how that will affect plans for the … stimulus programme,” David Lennox, resource analyst at Fat Prophets in Sydney, told AFP.

Analysts are waiting to see if the central bank will announce on Wednesday a cut to its $85 billion-a-month stimulus package following a string of upbeat economic data including a sharp fall in the unemployment rate.

A so-called tapering of the programme would likely boost the greenback, making dollar-priced oil more expensive for countries using other currencies, dampening demand.

European benchmark Brent gained support after armed protesters in crude producer Libya on Sunday refused to lift a months-long blockade of vital oil terminals in the eastern part of the country.

A tribal chief last week had said that the blockade would be lifted on December 15.

The protests, as well as blockades of fuel deliveries by the Berber minority, have slashed Libya’s output to about 250,000 barrels per day, from normal levels of nearly 1.5 million.

Source: AFP

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