Last week, both benchmarks posted their second straight weekly decline as disappointing Chinese economic data raised fears for demand growth in the world’s biggest crude importer.
This was helping to erase the momentum in prices after Saudi Arabia pledged to cut production in July by 1 million barrels per day (bpd).
“Oil prices are locked in a clash between two opposing forces: bears pointing to monetary tightening and bulls expecting lower inventories in the second half of 2013,” Francisco Blanch of Bank of America Global Research said in a statement. a note.
“The bears will hold the upper hand for now as oil prices will struggle to rise until the Fed eases the money supply,” he added. The entity continues to expect Brent to be around $80 per barrel in 2023.
The Fed’s rate hikes have strengthened the greenback, making dollar-denominated commodities more expensive for holders of other currencies and dragging down prices.
Most market players expect the Fed to keep rates unchanged when it wraps up its two-day policy meeting on Wednesday.