Oil Prices Drop as Markets Brace for U.S. Fed Meeting

Oil prices dropped in early Asian trading on Monday ahead of the U.S. Federal Reserve meeting, as investors looked to figure out whether the central bank would vote to raise interest rates.

As of 11:01 AM BKK time, Brent crude futures fell 85 cents, or 1.14%, to $73.94 per barrel. West Texas Intermediate (WTI) crude dropped 1.10%, or 77 cents, to $69.40 per barrel.

Weak Chinese economic data aggravated fears about demand growth in the world’s largest crude importer, countering a boost in prices from Saudi Arabia cutting an extra 1 million barrels per day from July, leading to a second consecutive weekly decline for both benchmarks.

Interest rates are widely expected to remain steady once the Federal Reserve ends its two-day monetary policy meeting on Wednesday. 

According to the CME FedWatch tool, the markets currently price in a 71% chance that the Fed would maintain its current policy at its upcoming meeting on June 13-14.

Goldman Sachs trimmed its oil price projections on higher-than-expected supplies from Russia and Iran and upped 2024 supply forecasts for the two exporters and Venezuela by 800,000 bpd.