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Oil falls more than 1% ahead of US Federal Reserve rate decision

12 June 2023 09:00 (UTC +04:00)

Oil prices declined on Monday ahead of a U.S. Federal Reserve meeting as investors tried to gauge the central bank's appetite for further rate hikes, while concerns about China's fuel demand growth and rising Russian crude supply weighed on the market, APA reports citing Reuters.

Brent crude futures fell 97 cents, or 1.3%, to $73.82 a barrel by 0437 GMT. U.S. West Texas Intermediate (WTI) crude was at $69.24 a barrel, also down 1.3%.

"Oil prices are caught in a clash between two opposing forces, bearish asset allocators who point to monetary contraction and bullish oil speculators expecting lower inventories in 2H23," Bank of America Global Research's Francisco Blanch said in a note.

"The bearish allocators will maintain the upper hand for now, as oil prices struggle to rally until the Fed eases money supply," Blanch said. The bank still expects Brent crude to average about $80 a barrel in 2023.

The bank's December crude price forecast now stands at $86 a barrel for Brent, down from $95, and at $81 a barrel for WTI, down from $89.