Oil: Another rally, then profit-taking dive on ‘overbought’ signs
Investing.com - Crude prices jumped almost $2 a barrel Tuesday before giving back everything to settle a touch lower as warnings of an overbought market led to profit-taking and tempered some of the bull mania of the past three weeks driven by just one thing: notion of tight supply., crude for delivery in November settled Tuesday’s trade at $90.48 per barrel, down 10 cents on the day. The U.S. crude benchmark rose to $92.41 earlier in the session, its highest since November 2022.
"The Saudi appetite to withhold oil from market, supported by Russia maintaining a certain level of export constraint, points to higher prices in the short term, all else equal, but $90 prices look unsustainable given faster supply growth than demand growth ex-Saudi/Russia," Citi's global head of commodity research Ed Morse and his team wrote to investors.
Tuesday’s price reversal also came ahead of two other developments: a Federal Reserve update on monetary policy and weekly U.S. oil inventory data.The Fed’s policy-makers aren’t expected to raise interest rates when they meet on Sept. 20, after 11 hikes that added 5.25 percentage points to a base rate of just 0.25% in February 2022.
Beyond the Fed, markets are also awaiting rate decisions from the Bank of England, the People’s Bank of China and the Bank of Japan this week.
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