Oil prices fell on Tuesday ahead of the release of the minutes of the US Federal Reserve’s (Fed) most recent meeting to gain insight into demand in the US and the Fed’s interest rate policy.
International benchmark Brent crude traded at $83.24 per barrel at 10.29 a.m. local time (0729 GMT), a fall of 0.56% from the closing price of $83.71 per barrel in the previous trading session.
American benchmark West Texas Intermediate (WTI) traded at $78.84 per barrel at the same time, a 0.58% decrease from the previous session that closed at $79.30 per barrel.
Oil prices drifted lower on Tuesday due to ‘cautious’ guidance from Fed official statements that disclosed that interest rate cuts should not be implemented hastily.
The recent statements issued by Fed officials put downward pressure on oil prices by fueling demand concerns.
US Federal Reserve Vice Chair of Supervision Michael Barr said Monday that he thinks inflation readings in the first quarter of this year were ‘disappointing.’
Meanwhile, San Francisco Fed President Mary Daly said it was unclear whether inflation had definitively decreased, adding that there was ‘no urgency’ to adjust interest rates. At the same time, the head of the Federal Reserve Bank of Cleveland, Loretta Mester, said that inflation risks are on the rise.
Market players are now awaiting the American Petroleum Institute’s (API) forecast for commercial crude oil inventories to be released later on Tuesday to gauge demand in the US, the world’s largest oil-consuming country.
The US Energy Information Administration (EIA) will release official stockpile data on Wednesday.
Nonetheless, political uncertainties in Iran and Saudi Arabia, the world’s major oil producers, are bolstering supply risks and supporting upward price movements.
Tehran confirmed earlier on Monday that Iranian President Ebrahim Raisi, along with Foreign Minister Hossein Amir-Abdollahian and other officials, perished in a helicopter crash on Sunday afternoon in the mountainous province of East Azerbaijan.
The crash occurred while the helicopter was returning from an inauguration and commissioning ceremony for two hydroelectric complexes on the Iran-Azerbaijan border.
