By Sibel Morrow
ANKARA (AA) - Oil prices dipped on Monday over investor cautiousness ahead of a US Federal Reserve (Fed) meeting, where a further interest rate hike is widely anticipated.
International benchmark Brent crude traded at $80.50 per barrel at 10.04 a.m. local time (0704GMT), a 0.47% loss from the closing price on Friday of $80.88 a barrel.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $76.69 per barrel, down 0.49% from Friday's session's close of $77.07 per barrel.
The Fed held interest rates steady at its most recent meeting in June, following 10 straight rate hikes aimed at slowing down high inflation.
"The Fed is expected to hike rates a further 25 bps (basis points) to 5.25–5.50% and leave the door open to a further hike in the fourth quarter, with the emphasis again on taking time to assess the economy’s progress and the cumulative and lagging impact of its 500 bps of rate hikes," ADM Investor Services' Chief Global Economist Marc Ostwald said in an e-mailed note.
The two-day Fed meeting begins on Tuesday, and if the agency decides to raise rates, prices are projected to fall further, indicating a decline in crude demand.
The depreciation in the US dollar ahead of the Fed meeting is offering some price support, as US dollar-indexed oil purchases become cheaper for buyers holding other currencies. This leads to an increase in demand and, as a result, an increase in crude oil prices.
Meanwhile, the head of the International Energy Agency (IEA), Fatih Birol, said the agency will revise its global oil demand growth projections based on the economic growth prospects of China and some other countries.
Birol said the IEA will monitor the growth of many countries in the second half, with a special focus on Chinese growth prospects.
Birol's remarks came during a meeting in India of 20 energy ministers from major economies, which failed to reach an agreement on phasing down fossil fuels due to opposition from several producer nations.