Oil prices recorded a slight increase today, Tuesday, as investors sought to take advantage of the sharp decline seen yesterday. However, the rise was limited due to ongoing caution ahead of the anticipated monetary policy decisions from the Federal Reserve (the U.S. central bank) and other central banks. Brent crude futures rose by 16 cents, or 0.2%, to $72.00 per barrel by 00:48 GMT, while U.S. West Texas Intermediate crude increased by seven cents, or 0.1%, to $67.19 per barrel. Both benchmark crude oils fell by about three dollars per barrel on Monday, as analysts focused on global supply growth and concerns about demand ahead of key inflation data and the two-day meeting of the U.S. central bank, which ends tomorrow, Wednesday.
Most observers expect the Federal Reserve to keep interest rates unchanged at its policy meeting. Interest rate hikes strengthen the dollar, making dollar-denominated commodities more expensive for holders of other currencies, which negatively impacts prices. The European Central Bank is expected to raise interest rates by a further quarter percentage point on Thursday to curb inflation. In China, disappointing economic data last week raised concerns about demand growth in the world's largest crude importer, wiping out the price gains seen after Saudi Arabia pledged to cut its oil production by an additional one million barrels per day in July.
