Brent holds above $90 reached last week

New York/Singapore — Brent crude futures held above $90 a barrel on Tuesday, while investors awaited macroeconomic data that could indicate whether interest rates will rise further in the US and Europe and the repercussions that would have for oil demand.

November Brent crude futures rose 28c to $90.92 a barrel at 3am GMT, while US West Texas Intermediate crude futures for October edged 35c higher to $87.64.

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 until the end of the year.

Traders will be watching August US 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, CMC markets analyst Tina Teng said. 

The US Federal Reserve is widely expected to leave 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 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 in 2023 and 2024 than previously expected.

Investors awaited industry data on US crude stocks due at 8.30pm GMT on Tuesday. Crude inventories were expected to have fallen by about 2-million barrels in the week to September 8, a preliminary Reuters poll showed on Monday.

Also this week, the International Energy Agency (IEA) and oil cartel Opec will release monthly reports. The IEA last month lowered its 2024 forecast for oil demand growth to 1-million barrels per day, citing lacklustre macroeconomic conditions. Opec’s August report, meanwhile, kept its 2.25-million barrels per day demand growth forecast for 2024 unchanged.

Reuters