Crude oil futures rose on Tuesday (Jan. 31) with the WTI crude futures closing up 97 cents, or 1.25%, to $78.87 a barrel, while Brent crude futures fell 41 cents, or 0.48%, to $84.49 a barrel. The increase in WTI crude futures was supported by a weak dollar and data indicating a rise in demand for crude oil in the United States.
The US Energy Information Administration (EIA) reported that demand for crude oil and petroleum products in the US rose by 178,000 barrels per day in November to 20.59 million barrels/day, the highest level since August 2022. The weak dollar also boosted crude oil contracts, as the dollar index against a basket of six major currencies was down 0.18% at 102.1000 overnight.
The weakening of the dollar came from the report that US labor costs in the fourth quarter of 2022 grew at the lowest rate in a year, which may lead the Federal Reserve (Fed) to delay raising interest rates. The market expects the Fed to raise rates by 0.25% at its meeting, scheduled to be announced on Wednesday (Feb. 1).
Investors are eagerly awaiting the minutes of the Joint Ministerial Review Committee (JMMC) meeting of the Petroleum Exporting Countries and Allies (OPEC+) and the weekly crude inventory report from the U.S. Energy Information Administration (EIA). The market expects the JMMC meeting to agree to maintain the current policy of cutting output by 2 million barrels per day until the end of 2023.
The spot Market is Open
Wednesday, February 1, 2023