Oil is slightly retreating on Wednesday although still holding steadily high. The industry statistics put pressure on the prices. Preliminary data from the American Petroleum Institute revealed that crude inventories in the US rose by almost 1.5 million barrels last week. Trade uncertainties are also dragging oil prices down today as it is still unclear whether the White House will impose new tariffs on Chinese goods. This factor will continue to influence market sentiment until the official statement is finally made.
According to early reports, China expected the US to delay the imposition of tariffs planned for December 15. This news supported oil prices at first. However, the prices edged lower afterwards as the White House denied this reports and said that the topic of the additional tariffs on Chinese goods was still “on the table.”
Oil Brent did not manage to extend gains during the previous session and rose by just 0.03%. West Texas Intermediate was up by 0.19%. The oil quotes could have been affected by the US Energy Information Administration forecast predicting a decrease in oil production in the country next year. The outlook for oil prices, however, remained unchanged. Early in the session, Brent has lost 0.65% whereas WTI crude fell by 0.54%. The benchmark oil is trading today at 63 dollars 92 cents. WTI oil futures have settled at 58 dollars 90 cents per barrel. During the day, Brent is expected to trade in the range between 63 and 64 dollars a barrel.
Today, traders’ attention will be drawn to the release of the OPEC monthly report, as well as to the official data on the US crude inventories. Oil stockpiles are expected to decline for the second consecutive week. The upcoming meeting of the Federal Reserve this evening will have a significant influence on the oil market and on all risk assets. Investors will be waiting for some clues regarding the Fed’s future monetary policy.
Today, the Russian currency is trading firmly high against the US dollar. The ruble is mainly supported by high oil prices. The dollar/ruble pair has settled at the level of 63.56. However, the ruble is at risk of falling lower ahead of the US Senate decision on new sanctions against Russian and the meeting of the US Federal Reserve. Given the steady macroeconomic data received lately, Jerome Powell may choose to keep the key rate unchanged in the future. This policy may support the US dollar, thus pushing the ruble lower. With this scenario, the pair will again return to the mark of 64 and above. In case Powell’s speech is pessimistic, the US dollar may weaken considerably.
While waiting for Jerome Powell’s speech, traders will focus on the US consumer inflation data.
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