Brent reached US$90 a barrel last week for the first time in 10 months after Saudi Arabia and Russia announced they would extend voluntary supply cuts until the end of the year. — Reuters
SINGAPORE: Brent crude futures holds above US$90 as investors await macroeconomic data that could indicate whether interest rates will rise further in the United States and Europe and the repercussions that would have for oil demand.
November Brent crude futures rose 28 US cents to US$90.92 a barrel, while US West Texas Intermediate crude futures for October edged 35 US cents higher to US$87.64.
Brent reached US$90 a barrel last week for the first time in 10 months after Saudi Arabia and Russia announced they would extend voluntary supply cuts of a combined 1.3 million barrels per day (bpd) until the end of the year.
Traders will be watching August US consumer price index data, due for release today, which could well determine how much further interest rates rise in the world’s largest economy and biggest oil consumer, said Tina Teng, markets analyst at CMC.
The US Federal Reserve (Fed) is widely expected to leave interest rates unchanged at a policy meeting next week, though views are split over whether the Fed will raise rates or pause again in November.
The medium-term outlook for oil “remains bullish, with China reporting better economic data,” said Teng, adding that the Organisation of the Petroleum Exporting Countries and its allies (Opec+) output cuts are also the key factor behind the market’s upward momentum.
Meanwhile, the European Central Bank will announce its interest rate decision tomorrow.
The European Commission on Monday forecast the eurozone to grow more slowly than previously expected in 2023 and 2024.
Investors also awaited industry data on US crude stocks. Crude inventories were expected to have fallen by about two million barrels in the week to Sept 8, a preliminary Reuters poll showed on Monday.
Also this week, the International Energy Agency (IEA) and Opec will release monthly reports.
The IEA last month lowered its 2024 forecast for oil demand growth to one million bpd, citing lacklustre macroeconomic conditions.
Opec’s August report, meanwhile, kept its 2.25 million bpd demand growth forecast for 2024 unchanged. — Reuters
