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Brent crude futures held above $90 a barrel on Tuesday, while investors awaited macroeconomic data that could indicate whether interest rates will rise further in the U.S. and Europe and the repercussions that would have for oil demand.
November Brent crude futures rose 28 cents to $90.92 a barrel at 0300 GMT, while U.S. West Texas Intermediate crude futures for October edged 35 cents higher to $87.64.
Brent reached $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 would be watching August U.S. consumer price index data, due for release on Wednesday, 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 U.S. Federal Reserve is widely expected to leave interest 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 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 on Thursday. The European Commission on Monday forecast the euro zone to grow more slowly than previously expected in 2023 and 2024.
Investors also awaited industry data on U.S. crude stocks due at 2030 GMT on Tuesday. Crude inventories were expected to have fallen by about 2 million barrels in the week to Sept. 8, a preliminary Reuters poll showed on Monday.
Also this week, the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC)will release monthly reports.
The IEA last month lowered its 2024 forecast for oil demand growth to 1 million bpd, citing lackluster macroeconomic conditions. OPEC’s August report, meanwhile, kept its 2.25 million bpd demand growth forecast for 2024 unchanged.
