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U.S. Fed to release minutes of latest meeting on Wednesday
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Expectations of tighter oil supply, China demand lend
support
By Shariq Khan
Feb 22 (Reuters) - Oil prices were steady on Wednesday
as investors await the U.S. Federal Reserve's comments after
recent data pointed to the possibility of more interest rates
hikes, which may lower economic growth and limit global fuel
demand.
Brent crude futures for April delivery were up 2
cents to $83.07 a barrel by 0242 GMT after falling 1.2% on
Tuesday. West Texas Intermediate (WTI) crude futures for
April were down a cent to $76.35 a barrel. The March WTI
contract expired on Tuesday down 18 cents.
The U.S. Fed will release the minutes of its latest meeting
on Wednesday, which will give traders a glimpse of how high
officials are projecting interest rates will go after recent
data showed stronger-than-expected U.S. employment and consumer
prices. Other economic reports from the U.S., the world's biggest
oil consumer, showed some troubling signs however. Sales of
existing homes fell in January to their lowest since October
2010, the 12th monthly drop, which is the longest streak since
1999. "Oil prices came under pressure ... as weak economic data
raised concerns about demand in advanced economies," said Daniel
Hynes, senior commodity strategist at ANZ Bank, in a note.
"Further rate hikes could dampen oil demand."
Higher interest rates tend to lift dollar prices, making
dollar-denominated oil more expensive for holders of other
currencies. Expectations of tighter global supplies and rising demand
from China have recently lent support to oil prices. Analysts
expect China's oil imports to hit a record high in 2023 to meet
increased demand for transportation fuel and as new refineries
come on stream.
ANZ's Hynes noted that PetroChina and Unipec, the trading
arm of Sinopec, Asia's biggest oil refiner, have booked 10
supertankers to import oil from the U.S. next month, equal to
about 20 million barrels of crude.
(Reporting by Shariq Khan; editing by Christian Schmollinger)
