PT Solid Gold Berjangka | WTI holds steady near $70.00 as traders brace for Fed rate decision
Solid Gold Berjangka | West Texas Intermediate (WTI), the U.S. crude benchmark, traded around $70.20 on Tuesday (12/17). WTI prices were flat as traders await the Federal Reserve’s (Fed) interest rate decision on Wednesday. However, concerns over sluggish global demand growth in China may cap the black gold’s gains for the time being.
China’s Retail Sales in November came in slower than expected, raising concerns about weaker consumer spending in China. This, in turn, weighed on WTI prices as China is the world’s largest oil importer.
Data released by China’s National Bureau of Statistics on Monday showed that the country’s Retail Sales rose 3.0% YoY in November compared to 4.8% previously, below market consensus of 4.6%. “This is just a very pessimistic scenario where there’s not much hope for crude demand growth,” said Bob Yawger, director of energy futures at Mizuho in New York.
Analysts believe the market may turn cautious, and traders may take profits while waiting for the Federal Reserve (Fed) interest rate decision on Wednesday. The US Fed is expected to cut interest rates by 25 basis points (bps) at its December meeting. Traders will take more cues from the press conference and the dot-plot after the monetary policy meeting. Any aggressive statements from Fed officials could lift the greenback and drag the USD-denominated commodity prices lower.
On the other hand, geopolitical risks amid additional sanctions on Russian and Iranian crude producers could help limit WTI losses. US Treasury Secretary Janet Yellen has highlighted the possibility of targeting Chinese banks and “black fleet” tankers to curb oil revenues that fund Russia’s war in Ukraine. Further, increased sanctions on Iran’s crude exports could boost WTI prices.
Source: Invensting