That defied expectations for a drawdown of about 1.6 million barrels from eight analysts polled by Reuters. Traders and analysts will be looking out for data from the U.S. Energy Information Administration on Wednesday to see whether it confirms signs of weaker crude demand. At the same time, markets are awaiting the outcome of the U.S. Federal Reserve's meeting on Wednesday, in what is widely seen as the most challenging Fed policy decision in recent times.
Following the meeting, Chair Jerome Powell is expected to
unveil new economic projections and the central bank's path for
interest rate hikes.
While the market expects the Fed to raise rates by 25 basis
points on Wednesday, some top central bank watchers say it could
well pause further rate hikes or delay releasing new economic
projections due to ructions in the global banking sector.
A pause in rate hikes would help stoke economic activity and
in turn boost fuel demand.
Oil prices posted their biggest declines in months last
week, after high-profile U.S. bank failures beginning March 10
and a crisis at Europe's Credit Suisse culminated in an
emergency rescue over the weekend.
OPEC+ officials, hedge fund managers and oil market
participants have called the recent decline in oil prices
speculative and insisted that increasing demand will push prices
to higher levels in the coming months.
(Reporting by Sudarshan Varadhan; Editing by Sonali Paul)
