Brent Steady With U.S. Data In Focus
Brent crude oil traded steadily at $107.52 at 7:00 GMT on Wednesday morning as investors anxiously awaited the Federal Reserve meeting outcome as well as key U.S. data, due out on Wednesday and Friday.
The commodity has been under pressure recently despite ongoing conflicts in oil-rich regions, as most investors see the market as oversupplied.
The Fed is set to close its two-day policy meeting on Wednesday afternoon with a statement outlining the bank’s future plans. Fed Chair Janet Yellen will not be speaking following this meeting, so all eyes will be on the bank’s statement. Many believe that with the U.S.’ recent positive economic data, the bank will change the wording in its policy statement to express the possibility of an early rate hike.
U.S. second quarter GDP is also due out on Wednesday, with most expecting to see that the U.S. economy grew by 3.2 percent following its first quarter contraction. If the figure meets expectations, it will erase any doubt that the first quarter weakness wasn’t caused by weather conditions. The GDP figure, coupled with Friday’s release of non-farm payrolls could have the potential to lift Brent prices if both are strong.
Meanwhile, the tense relationship between the West and Russia continued to worsen as the U.S. and the EU enacted more sanctions against Moscow, this time targeting the nation’s finance, energy and defense sectors. CNBC reported that some see the latest sanctions, especially those focused on the energy sector, slowing down Russian oil exports.
Moving forward, investors will be waiting for the Energy Information Administration’s report on U.S. crude stocks for a better picture of the nation’s oil appetite. The American Petroleum Institute’s version of the same data showed that U.S. inventories fell by 4.4 million barrels last week, much higher than expectations for a decline of 1.5 million barrels.
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