Crude Down Ahead Of Expected Fed 25bp Hike

Oil prices have been range trading during the APAC session, ahead of the Fed’s decision today, after beginning to recover this week as risk appetite improved. WTI is down 0.6% today to $69.30/bbl, still below $70, after reaching a low of $68.97 and a high of $69.54 earlier. Brent is down 0.5% to $74.95, off the intraday low of $74.62. The USD index is flat.

• The oil market slumped as news of troubled banks hit the wires. But fundamentals seem more positive than recent price action would suggest with output likely to be reduced, possibly in Russia, and demand from China recovering. Uncertainty regarding the economic impact of recent bank problems may continue to cause volatility in the crude market. Price forecasts for H2 2023 are between $80 and $140, according to Bloomberg.
• The focus is on the Fed announcement later today. Economists expect a 25bp hike and the OIS market has just over an 80% chance of 25bp priced in. The EIA releases the official US inventory data today. ECB President Lagarde speaks and UK CPI data for February prints.