Oil Prices Stabilize After Sliding on Rate Rise Concerns, While Russian Crude Flows

Oil prices stabilized in early Asian trade on Tuesday, after plunging more than 2% in the previous session due to the possibility of additional interest rate hikes and ongoing Russian oil exports.

By 01:55 GMT, Brent crude prices rose 28 cents to $85.18 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 9 cents to $77.99 per barrel.

Investors anticipate that the U.S. Federal Reserve will boost interest rates by 25 basis points on Wednesday, followed by a half-point hike by the Bank of England and European Central Bank on Thursday. Increasing interest rates could slow the global economy and reduce oil demand.

The market also focused on a planned virtual conference of the ministers of the Organization of the Petroleum Exporting Countries (OPEC) and others, including Russia, on February 1 at 1100 GMT. This group is known as OPEC+.

Five OPEC+ members told Reuters on Monday that the panel is anticipated to propose maintaining the oil producing group's existing output policy intact when it meets this week.

In October, OPEC+ agreed to reduce its production target by 2 million barrels per day (bpd), or around 2% of global demand, from November through the end of 2023.

Russia continues to provide oil to the global market despite a European Union boycott and G7 price ceiling imposed in response to its invasion of Ukraine, which pushed up prices.

Providing some support for oil prices, the U.S. dollar index has declined 1.3% thus far in January. A weakening dollar reduces the price of crude oil for foreign buyers.