Oil prices rise as traders await macroeconomic data

September 12, 2023 (MLN): Oil prices climbed on Tuesday in anticipation of macroeconomic data that could provide insights into whether interest rates will rise further in the U.S. and Europe.

Brent crude is currently trading at $90.55 per barrel, up by 0.33% on the day.

While West Texas Intermediate crude (WTI) is trading at $87.05 per barrel, up by 0.34% on the day.

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, as Reuters reported.

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 eurozone 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.

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 2.25m bpd demand growth forecast for 2024 unchanged.

Copyright Mettis Link News