Oil on the rise ahead of Fed

Oil rose along with Asian stocks ahead of interest rate decisions by major central banks. U.S. crude rose above $87 a barrel after losing nearly 3 percent in the previous two sessions. The Federal Reserve is due to make a decision on rates on Wednesday as central banks continue to tighten monetary policy to curb inflation. A weaker dollar has also supported oil, making commodity prices in the currency more attractive to investors. Oil has lost nearly a third of its value since the start of June, capping its first monthly gain since May last month after the OPEC+ alliance agreed to significant output cuts. The group’s Secretary-General Haitham al Ghais said on Monday that oversupply was the main reason for cutting output from November. “If interest rates go up, then the probability of a recession is higher and OPEC is right to be concerned that this will lead to further demand destruction. However, OPEC’s bias is to keep supply tight and they are unlikely to want to let up,” said Vishnu Varathan, head of Asia economics and strategy at Mizuho Bank.