Oil resumes losses as US crude stocks rise
Global oil prices fell in American trade on Wednesday, resuming losses after a short hiatus, with US crude approaching four-week lows, while Brent stepped closer to three-week lows as US crude stocks rose according to initial data.
Traders await the official report from the EIA later today, expected to show the first buildup in two and a half months.
Prices are also pressured by concerns about US President Donald Trump’s aggressive trade plans, which could include tariffs on Canada and Mexico next Saturday.
Prices
US crude fell 1.3% to $72.96 a barrel, with a session-high at $74.04.
Brent fell 1.3% to $76.57 a barrel, with a session-high at $77.69.
On Tuesday, US crude rose 1.2% away from a four-week trough at $72.42, while Brent added 1.25% away from January 9 lows at $76.27.
Oil prices were also boosted by growing concerns about supply disruptions in Libya.
US Stocks
Initial data from the American Petroleum Institute showed US crude stocks rose by 2.9 million barrels in the week ending January 24, while analysts expected a buildup of 3.7 million barrels.
Now traders await official data from the EIA later today, also expected to show a buildup.
Tariffs
The White House said on Tuesday that US President Donald Trump still plans to impose 25% tariffs on both Canada and Mexico next Saturday, which would significantly disrupt the markets.
Bitcoin rebounds before Fed's policy decisions
Bitcoin rose over 1.5% on Wednesday on track for the first profit in five days away from two-week lows, and before the Federal Reserve’s policy decisions today.
It comes as the risk appetite improved and concerns about China’s DeepSeek AI model receded, while MicroStrategy expanded its holdings of bitcoin.
The Price
Bitcoin rose 1.5% at Bitstamp today to $102,953, with a session-low at $101,288.
On Tuesday, bitcoin slipped 0.8%, marking the fourth loss in a row, after hitting a two-week trough at $97,750 following the DeekSeek drama.
Crypto Market Value
The market value of cryptocurrencies rose over $90 billion to a total of $3.632 trillion.
The Fed
The Federal Reserve is wrapping up its first periodic meeting of 2025 later today, with full expectations of maintaining interest rates unchanged at 4.50%.
The Fed is expected to provide more clues on the future monetary path in the US, with hints about upcoming rate cuts.
According to the Fedwatch tool, the odds of a 0.25% interest rate cut at today’s meeting stood at just 1%.
The odds of a similar cut in March stood at 30%.
MicroStrategy
Through the X platform, MicroStrategy’s CEO Micheal Saylor announced yet another round of bitcoin purchases amounting to 101,107 units, bringing the company’s total holdings to a record high.
The purchase occurred between January 22 and 27 at a total value of $1.07 billion, paying on average $105,596 per unit, with the company now holding 471,107 bitcoins over all with the average price of $64,580.
US dollar gains ground before Fed's decision
The US dollar rose in European trade on Wednesday and extended the gains for another session following tariffs remarks from US President Trump.
Later today, the Federal Reserve is widely expected to hold interest rates unchanged at its first policy meeting of the year, and will likely provide clues on the path ahead for US monetary policies this year.
The Index
The dollar index rose 0.3% today to 108.18, with a session-low at 107.75.
On Tuesday, the index rose 0.45%, the first profit in four sessions away from a six-week trough at 106.97.
Trump’s Tariffs
Donald Trump pledged to impose tariffs on some foreignly-manufactured products soon to force their makers to shift the production to the United States, including steel, aluminum, and copper products.
At the World Economic Forum in Davos, US President Donald Trump announced plans to pressure the Federal Reserve to cut rates, and called for other countries worldwide to take similar steps.
The US Senate approved the appointment of Scott Bessent as the new US Treasury Secretary, with some reports indicating that Bessent supports the concept of total tariffs starting from 2.5%.
Fed’s Rates
The Federal Reserve is wrapping up its first periodic meeting of 2025 later today, with full expectations of maintaining interest rates unchanged at 4.50%.
The Fed is expected to provide more clues on the future monetary path in the US, with hints about upcoming rate cuts.
According to the Fedwatch tool, the odds of a 0.25% interest rate cut at today’s meeting stood at just 1%.
The odds of a similar cut in March stood at 30%.
Gold edges down before Fed's decisions
Gold prices fell in European trade on Wednesday under pressure from the stronger dollar, as traders shun big positions before the Fed’s policy decisions later today.
The Federal Reserve is widely expected to hold interest rates unchanged this week, and will likely provide clues on the path ahead for US monetary policies this year.
The Price
Gold prices rose 0.85% on Tuesday, resuming gains and approaching a three-month high at $2786.
The Dollar
The dollar index rose 0.2% on Wednesday, extending gains for the second day in a row against a basket of major rivals.
A stronger dollar makes greenback-denominated gold futures costlier to holders of other currencies.
The gains come as US President Donald Trump threatens new global tariffs, while concerns about China’s DeekSeek AI model recede.
US President Donald Trump said he plans to impose new tariffs on imported chips, medicine, and steel in a push to force the manufacturers to ship their production into the US.
The Fed
The Federal Reserve is wrapping up its first periodic meeting of 2025 later today, with full expectations of maintaining interest rates unchanged at 4.50%.
The Fed is expected to provide more clues on the future monetary path in the US, with hints about upcoming rate cuts.
During his Davos speech, Trump said he’ll pressure the Fed to cut interest rates quickly, and called on other countries to take a similar path.
US Rates
According to the Fedwatch tool, the odds of a 0.25% interest rate cut at today’s meeting stood at just 1%.
The odds of a similar cut in March stood at 30%.
SPDR
Gold holdings at the SPDR Gold Trust rose 4.02 tons yesterday to a total of 861.04 tons, moving away from August 2024 lows at 857.02 tons.