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Business News/ Markets / Commodities/  Oil rally cools off as prices slip 2% ahead of US Federal Reserve verdict; Brent down to $85.9/bbl
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Oil rally cools off as prices slip 2% ahead of US Federal Reserve verdict; Brent down to $85.9/bbl

Brent had settled at its highest since October 31 in the previous session at $87.38 a barrel, while WTI hit its highest since October 27 at $83.47.

In January, India's total oil import bill increased slightly by over 4% sequentially to $12.04 billion, with a marginal year-on-year growth of 0.1%. (Image: Pixabay)Premium
In January, India's total oil import bill increased slightly by over 4% sequentially to $12.04 billion, with a marginal year-on-year growth of 0.1%. (Image: Pixabay)

International crude oil prices slipped on Wednesday, March 20, after hitting multi-month highs in the previous session, as investors braced for the US Federal Reserve's interest rate policy announcement later in the day. Analysts widely project the US central bank to maintain the status quo on its interest rates for the fifth straight meeting today.

Brent crude futures for May were down $1.39, or 1.59 per cent, at $85.99 per barrel. US West Texas Intermediate futures for April delivery, which expire on Wednesday's settlement, fell $1.80, or 2.16 per cent, to $81.67. The more active May WTI contract was at $81.22 a barrel, down $1.51 or 1.83 per cent, according to news agency Reuters. 

Brent had settled at its highest since October 31 in the previous session at $87.38 a barrel, while WTI hit its highest since October 27 at $83.47. Coming to domestic prices, crude oil futures were last trading 2.05 per cent lower at 6,746 per barrel on the multi commodity exchange (MCX).

Also Read: Oil hits 4-month high after Ukraine's drone attack on Russian refinery, OPEC cuts

Oil prices pullback ahead of Fed verdict

-Analysts said that the markets are concerned about the Federal Reserve's rate decision as interest rates have not fallen off like one would have expected. The Fed will announce its decision at 2 p.m. EDT on Wednesday.

-The Fed is not predicted to cut borrowing costs, but fresh economic projections could signal fewer interest rate cuts and a later start to the policy easing than previously expected.

-The US dollar index edged higher ahead of the Fed decision, which can also dent oil demand for buyers in countries using other currencies. The US Energy Information Administration (EIA) said crude oil stockpiles fell unexpectedly last week as exports rose and refiners continued to increase activity. 

-Elsewhere, Ukrainian attacks on Russian refining assets have helped propel crude prices higher as market participants assessed the impact on crude and fuel supply balances.

Where are prices headed?

Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services Ltd said, "Crude oil prices are trading slightly lower today, amid some profit-booking from recent rally and as we look ahead to weekly oil inventory data later in the day.''

Also, some caution is seen in the market ahead of the US Fed meeting outcome. Technically, momentum remains positive with support at 6,780/ 6,685 and resistance at 7,000.''

 

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Published: 20 Mar 2024, 10:32 PM IST
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