Crude oil prices rise in early trade

13 Jun 2023 , 12:12 PM

Tuesday saw a little increase in oil prices due to bargain hunters making up for the previous day’s drop, but gains were modest as investors remained cautious ahead of the U.S. Federal Reserve and other central banks’ important policy pronouncements.

The price of Brent crude futures had risen 16 cents, or 0.2%, to $72 per barrel. American West Texas Intermediate (WTI) crude was up 7 cents, or 0.1%, to $67.19 per barrel.

In the wake of increased global supply and worries about demand growth shortly before significant inflation data and a two-day Fed monetary policy meeting ending on Wednesday, both benchmarks fell by approximately $3 a barrel on Monday.

Because of China’s sputtering economic recovery, he continued, oil prices face a further danger to the negative. He forecast that WTI would primarily trade below $70 per barrel during the summer, but would range from $62.50 to $75.

The majority of market participants anticipate that the US Federal Reserve will maintain current interest rates during its policy meeting. Rate increases by the Fed have made goods denominated in dollars more expensive for holders of other currencies, which has a negative impact on prices.

In order to control persistent inflation, the European Central Bank is anticipated to increase interest rates by another quarter percentage point on Thursday. However, it is anticipated that the Bank of Japan will continue to adhere to its ultra-loose policy when it releases its plan on Friday.

China, the world’s largest crude importer, saw poor economic statistics last week, which countered an increase in prices brought on by Saudi Arabia’s promise to reduce output by an additional 1 million barrels per day in July.

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