[ad_1]
(Bloomberg) — Oil prices cooled after a big rally as traders focused on U.S. crude inventory data and the Federal Reserve’s interest rate decisions.
Most Read Articles on Bloomberg
West Texas Intermediate’s more active May contract fell nearly 2% to below $82 a barrel. Crude oil prices on Tuesday settled at their highest since late October. The American Petroleum Institute reported that U.S. crude oil reserves fell by 1.5 million barrels, according to a person familiar with the numbers. Gasoline stocks are also shrinking, with official figures to be released later on Wednesday.
The pullback occurred after oil prices were pushed into overbought territory and the algorithm reached its maximum buy position. Daniel Ghaly, commodity strategist at TD Securities, said the momentum in oil prices could shift to the downside as auto-buy tailwinds weaken.
After starting 2024 in a narrow trading range with limited volatility, oil prices have soared in recent weeks amid OPEC+ supply cuts and geopolitical risks such as Ukrainian drone attacks on Russian refineries. The rise was also driven by China’s generally positive growth data released earlier this week.
The U.S. central bank is expected to keep interest rates on hold for the fifth consecutive time at its meeting later Wednesday, but it could give hints as to when policymakers may be ready to ease. If the Fed moves to cut interest rates in the coming months, oil prices could rise well above the current consensus of $70 to $90 a barrel, said Carlyle Group’s Jeff Currie.
Click here to receive Bloomberg’s Energy Daily newsletter in your inbox.
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP
[ad_2]
Source link
