Brent crude hovered below $107 per barrel on Wednesday ahead of the outcome of a US Federal Reserve meeting and economic data that will be scoured for hints on the outlook for demand from the world’s top oil consumer.
But prices were set to post their biggest monthly rise in eleven months, helped by gains earlier in July amid geopolitical tensions that kept alive concerns about global oil supplies.
“All eyes are on the Fed statement, and I think in terms of the short term trajectory for risk assets, that’s going to be the focal point, followed by non-farm payrolls and other US data,” said Ben Le Brun, an analyst at OptionsXpress in Sydney.
“If there’s any suggestion the Fed is going to taper the current bond buying program as soon as September, then that’s US dollar positive and therefore a negative impact on everything that’s weighed in US dollar.”
The Fed, which will release its post-meeting statement at 1800 GMT, is expected to link the start of any tapering to data signals. There are two major US reports lined up for this week — the GDP data on Wednesday and non-farm payrolls on Friday.
