Oil is down as cautious investors await the Fed meet

Reuters.com

June 11 (Reuters) – Oil prices traded lower on Tuesday, as investors waited for key U.S. inflation data and the outcome of the Federal Reserve’s policy meeting to glean a clearer picture of where inflation is heading, and how that will affect fuel demand.
Brent crude futures fell 11 cents, or 0.13%, to $81.52 per barrel by 0433 GMT and U.S. West Texas Intermediate crude futures slipped 3 cents, or 0.04%, to $77.71.
The release of U.S. consumer price index data for May and the conclusion of the Fed’s two-day policy meeting are both scheduled for Wednesday.
“More conviction may be needed in oil prices for a more sustained recovery with a move above the US$83.00 level, given that the broader trend for oil prices still leans on the downside with a series of higher highs since April,” IG market strategist Yeap Jun Rong said.
A decline in Saudi crude exports to China for a third straight month put further pressure on prices.
Higher refinery margins were helping to support oil prices, as was the potential that the United States could boost crude purchases for its petroleum reserve, some analysts said.
Profit margins for a typical Singapore refinery that processes Dubai crude have averaged around $4 a barrel in the past three trading sessions, up from May average of $2.56 a barrel, LSEG pricing data showed.
It wants to buy back oil at about $79 a barrel.

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June 11 (Reuters): As investors bided their time for important U.S. s. data on inflation and the conclusions of the Federal Reserve’s policy meeting to obtain a more precise understanding of the direction of inflation and how it will impact the demand for fuel.

By 04:33 U.S. and GMT, Brent crude futures had dropped 11 cents, or 0.13%, to $81.52 per barrel. S. The price of West Texas Intermediate crude futures decreased by 3 cents, or 0.04%, to $77.71.

With expectations that the summer vacation season in the Northern Hemisphere will increase fuel demand this summer, prices had risen about 3% to a one-week high on Monday. However, some analysts predicted that this gain would be short-lived because higher interest rates were still a possibility.

the disclosure of U. s. On Wednesday, the Fed’s two-day policy meeting will come to an end and May consumer price index data will be released.

“Considering that the overall trend for oil prices still leans downward with a string of higher highs since April, more conviction in oil prices may be needed for a more sustained recovery with a move above the US$83.00 level,” IG market strategist Yeap Jun Rong stated.

Further pressure on prices came from a decline in Saudi crude exports to China for a third consecutive month.

According to some analysts, the possibility that the US could increase its purchases of crude for its petroleum reserve, along with higher refinery margins, was supporting the price of oil.

According to LSEG pricing data, the average profit margin for a typical Singapore refinery processing Dubai crude has increased to approximately $4 per barrel over the last three trading sessions from an average of $2.56 per barrel in May.

If WTI continues to be below $79, the possibility that the U. s. President of NS Trading, a division of Nissan Securities, Hiroyuki Kikukawa, stated that the company will take action to increase its strategic reserves if the price of oil continues to sustain.

The US. S. could speed up the process of restocking the Strategic Petroleum Reserve when stockpile maintenance is finished by year’s end, Energy Secretary Jennifer Granholm told Reuters last week. It wants to buy back oil at about $79 a barrel.

Editing by Sonali Paul and Miral Fahmy; reporting by Yuka Obayashi in Tokyo and Trixie Yap in Singapore.

The Thomson Reuters Trust Principles are Our Standards. Opens a new tab.

Yuka Obayashi covers commodities, metals, and energy in Japan.

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