Oil is falling before two upcoming meetings of OPEC+ and Fed

Oil prices fell on Monday, giving up previous gains, with the world’s major producers expected to keep production unchanged during an upcoming meeting this week, and as investors warned ahead of a Federal Reserve meeting that could spark market volatility.

Brent crude futures fell 20 cents, or 0.2 percent, to $86.46 a barrel by 0435 GMT, while US West Texas Intermediate crude was $79.57 a barrel, down 11 cents, or 0.1 percent.

Ministers from the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, collectively known as OPEC+, are unlikely to adjust their current oil production policy when they hold a virtual meeting on February 1.

However, signs of rising crude exports from Russia’s Baltic ports in early February caused Brent and U.S. mediator WTI to incur their first weekly losses in three weeks last week.

There are widespread expectations in the markets before the US central bank’s monetary policy meeting scheduled for January 31 and February 1 that it will reduce the pace of interest rate increases to 25 basis points from the 50 it announced in December, which may ease fears of an economic slowdown that would It reduces the demand for fuel.

Oil prices had earlier risen due to tension in the Middle East following a drone attack on a military factory in Iran and with China, the world’s largest crude importer, pledging at the weekend to boost consumption recovery, which will support fuel demand.

China will resume business this week after the Lunar New Year holiday. Citi analysts said in a note, citing data from China’s Ministry of Transport, that the number of passengers who moved ahead of the holiday rose more than the levels of two years ago, but was still below 2019 levels before the pandemic.