Oil prices held steady on Wednesday, ahead of the Federal Reserve’s rate hike decision, supported by a weaker dollar, which fell on signs of slowing inflation in the U.S., alleviating fears that the world’s largest oil user may enter a recession.
At 8.28 a.m. (Thai time), Brent crude futures were up 20 cents, or 0.2%, at $85.66 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were up 34 cents, or 0.4%, at $79.21 a barrel, adding to their gains of almost 1% from the previous session.
Reuters cites an ANZ commodities analyst that optimism increased as a result of strong earnings reports. Inflation slowing down has raised hope that the Fed can pause rate hikes for the time being.
Lowering expectations for rate hikes helped reduce the dollar index, which bolstered oil prices because a weaker dollar makes the commodity cheaper for purchasers holding other currencies.
The Organization of the Petroleum Exporting Countries and allies (OPEC+) will be gathering on Wednesday, and the market will be watching to see if they endorse the current output targets agreed upon in November.