Oil prices rise ahead of the Fed meeting as the Middle East crisis continues

 Oil prices rise ahead of the Fed meeting as the Middle East crisis continues

After dropping $1.33 on Tuesday, Brent January crude futures increased 36 cents, or 0.4%, to $85.38 a barrel at 0040 GMT. The contract expiration saw Brent December futures close 4 cents down at $87.41 a barrel.

Oil prices rise ahead of the Fed meeting as the Middle East crisis continues.

Ahead of this week's major meetings of central banks across the world, including the US Federal Reserve, oil prices slightly increased in early Asian trading on Wednesday. The market was also keeping a close eye on the most recent developments in the Israel-Hamas conflict.

After dropping $1.33 on Tuesday, Brent January crude futures increased 36 cents, or 0.4%, to $85.38 a barrel at 0040 GMT. The contract expiration saw Brent December futures close 4 cents down at $87.41 a barrel.

After falling $1.29 in the previous session, U.S. West Texas Intermediate oil futures climbed 28 cents, or 0.3%, to $81.30 a barrel.

Senior market analyst at OANDA Edward Moya stated, "Crude prices are stabilizing ahead of a key issuance update by the Department of the Treasury and FOMC rate decision," alluding to the FOMC, which determines the course of U.S. monetary policy.

"Geopolitical risks remain as well as that seems to be offsetting some of the historically high production levels currently are coming from the U.S."

Market sources quoting American Petroleum Institute numbers on Tuesday said that although gasoline stocks decreased by around 360,000 barrels last week, crude oil inventories increased by approximately 1.3 million barrels.

While rate cuts to encourage spending may result in an increase in oil consumption, interest rate rises intended to control inflation may delay economic development and lower oil demand.

According to a survey conducted by CME's Fedwatch tool, the Fed, which concludes its meeting on Wednesday, is anticipated to keep interest rates unchanged.

According to a Eurostat flash estimate, October inflation in the Euro zone was at 2.9%, down from 4.3% in September. This was the lowest level of inflation in the Euro zone in two years, raising doubts about an impending interest rate rise by the European Central Bank.

On Thursday, the Bank of England will convene.

Goldman Sachs analysts predicted in a memo that Brent prices will hit $100 per barrel by June as stockpiles gradually decline.

The market is now tightening at a modest rate, but the experts noted that it "may become very tight in a more distant future," with productivity and oil demand trends playing a crucial role as well.

In the Middle East, Israeli airstrikes on Tuesday killed at least 50 Palestinians including a Hamas leader in a heavily populated refugee camp in the Gaza Strip.

The United States and other nations are considering "a variety of possible configurations" for the future of the Gaza Strip in the event that Hamas terrorists are driven out of power, according to U.S. Secretary of State Antony Blinken, who is scheduled to visit Israel on Friday.