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US Crude Stays Flat on Supply Bet, FOMC Meeting

September 20, 2016 at 17:29 by Andrew Moran

Oil prices made very minor gains on Tuesday ahead of the Federal Open Market Committee (FOMC)‘s interest rates announcement. Traders are also betting that US supplies will rise, and many investors are not optimistic that Organization of the Petroleum Exporting Countries (OPEC) will cap oil output levels.

October West Texas Intermediate (WTI) crude rose $0.33, or 0.76%, to $43.63 per barrel at 17:02 GMT on Tuesday on the New York Mercantile Exchange. US crude prices have been trading at a one-month low on concerns regarding a global supply glut, a stronger dollar, and OPEC’s production efforts.

November Brent crude slipped $0.19, or 0.41%, to $45.76 a barrel on London’s ICE Futures exchange. Brent crude has failed to maintain any momentum and has been hovering around the $45 mark for several trading sessions.

Crude prices are staying relatively flat on Tuesday as investors wait for the Federal Reserve‘s decision as to what it is doing with interest rates this month. The US central bank will issue a statement on Wednesday afternoon.

A survey by S&P Global Platts found that analysts project weekly figures of crude stockpiles will go up 2.8 million barrels for the week ending September 16. This will be confirmed by the US Energy Information Administration (EIA) on Wednesday. Analysts also expect a decrease of 500,000 barrels in gasoline inventories.

Despite showing support among OPEC members to agree to a production freeze, it seems Libya, Nigeria, and Venezuela are no longer interested in discussing the idea. New reports suggest that the three OPEC members want to raise their oil exports ahead of the September 26 to 28 informal meeting in Algeria. The three nations would likely not agree to an output limit at current levels.

Iran has also been open to rejecting calls for a cap on production. One of the world’s biggest oil producers has expressed that it wants to increase its own market share.

With recent positive economic data coming out of China, experts forecast that the world’s second-largest consumer of oil will have imported nearly 33 million tons of crude in August.

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