Oil prices have stepped back from their recent 10-month highs due to uncertainty surrounding the imminent interest rate decision by the U.S. Federal Reserve. Investors are wrestling with questions regarding when interest rates will reach their peak and what repercussions this might have on energy demand.
In spite of larger-than-expected reductions in U.S. oil stockpiles and sluggish production in the U.S. shale sector, which signal a constrained supply of crude oil for the remainder of 2023, prices have witnessed a decline.
Investors are closely following various central bank interest rate decisions this week, including the statement from the United States Federal Reserve on Wednesday. Their goal is to assess the forecast for economic development and the desire for fuel. While it is widely expected that the Fed would keep its current interest rates, the attention is on the unknown trajectory of its future policies.
Reports, citing data from the American Petroleum Institute, indicate that U.S. crude oil inventories saw a decrease of approximately 5.25 million barrels last week, surpassing the forecasts of analysts in a Reuters poll who had projected a decline of 2.2 million barrels.
Furthermore, there are indications that the Russian government is contemplating imposing higher export duties, set at $250 per metric ton, on all categories of oil products from October 1st until June 2024. This step is aimed at addressing fuel shortages, amid ongoing production cuts by Saudi Arabia and Russia, amounting to 1.3 million barrels per day, extended until the year’s end.
Meanwhile, on the demand side, government data reveals that India’s crude oil imports have declined for the third consecutive month in August. This decline is attributed to maintenance activities by refiners and reduced shipments from Russia, in the world’s third-largest oil-importing nation.
On the supply front, Exxon Mobil Corp has committed to augmenting oil production by nearly 40,000 barrels per day in Nigeria. This strategic move is part of their new investment plan in the country, as confirmed by a spokesperson for Exxon, citing the company’s president of global upstream operations.
Please note that this articles does not offer any instructions or suggestions regarding investment decisions. Therefore, it is essential that you carefully evaluate your financial situation and conduct thorough analysis, or seek advice from a qualified professional, before making any investment decisions.