---
title: "Oil ticks higher ahead of Fed policy decision, OPEC+ guidance"
description: "Oil edged higher before a Federal Reserve monetary-policy decision and guidance from producer group OPEC and its allies."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Business Maverick"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2023-02-01-oil-ticks-higher-ahead-of-fed-policy-decision-opec-guidance/"
published: "2023-02-01T05:51:47"
lang: "en-ZA"
word_count: 276
---

# Oil ticks higher ahead of Fed policy decision, OPEC+ guidance

> Oil edged higher before a Federal Reserve monetary-policy decision and guidance from producer group OPEC and its allies.

By Bloomberg · Published 1 February 2023, 07:51 SAST

## Key points
- Oil prices rose above $79 a barrel on Tuesday as traders anticipate the US central bank's interest-rate decision and a meeting of OPEC and its allies. Signs of cooling inflation and increasing demand in China have buoyed the market, however any hawkish guidance from the Fed could reverse gains. The American Petroleum Institute reported an increase in commercial crude inventories last week, while time spreads fluctuated with Brent trading at $4.78 a barrel in backwardation. Investors will be watching closely for further indications of where the market is heading.
- WTI rose above $79 a barrel on Tuesday, as traders await the US central bank's interest-rate decision.
- OPEC and allies are expected to hold output steady at a monitoring meeting on Wednesday.
- Crude capped a third monthly loss in January despite increased consumption in China.
- Time spreads between Brent contracts have fluctuated, with the gap currently at $4.78 a barrel in backwardation.

## Content

West Texas Intermediate rose above $79 a barrel after gaining more than 1% on Tuesday. While the US central bank is expected to deliver another interest-rate hike at Wednesday’s meeting, it’s likely to be just half the size of the 50-basis-point move agreed in December as inflation shows signs of cooling.

Traders will also track any guidance from the Organisation of Petroleum Exporting Countries and its allies including Moscow. Delegates predict that [output](https://www.bloomberg.com/news/articles/2023-01-31/opec-treads-wary-path-on-oil-policy-amid-china-rebound-russia-sanctions) will be held steady at a monitoring meeting on Wednesday ahead of a fresh round of curbs on Russian energy flow that will kick in within days.

Crude capped a third monthly loss in January even amid a wave of optimism that China’s ending of its strict Covid-Zero policy will rekindle demand in the world’s largest crude importer. A range of indicators have pointed to increased consumption as mobility and industrial activity start to pick up.

“Oil prices seem to be finding its footing,” said Yeap Jun Rong, market strategist at IG Asia Pte in Singapore. Still, “any hawkish takeaway from the Fed could bring back some downward pressure,” he said.

The industry-funded American Petroleum Institute, meanwhile, reported that US commercial crude inventories expanded by 6.3 million barrels last week, according to people familiar with the figures, as stockpiles of gasoline and diesel also increased. Official figures will be issued later on Wednesday.

Amid the market’s crosscurrents, time spreads have fluctuated. The gap between the next two December contracts for global benchmark Brent — a widely-watched metric — was $4.78 a barrel in backwardation. A week ago, the figure was $5.16 a barrel, and it touched a low of $2.19 in December. **BM/DM**