Last Update: May 04, 2023, 00:50 IST
The day before, both benchmarks fell 5%, their biggest daily percentage declines since early January. (Image: Reuters file)
US West Texas Intermediate crude (WTI) fell $3.06, or 4.3%, to $68.60. WTI hit a session low of $67.95 a barrel, the lowest since March 24.
Oil prices fell 4% on Wednesday, trimming heavy losses from the previous session after the US Federal Reserve hiked interest rates and investors worried about the economy.
Brent futures settled $2.99 lower, or 4%, at $72.33 a barrel, the global benchmark’s lowest level since December 2021. Brent touched a session low of $71.70 a barrel, its lowest since March 20.
US West Texas Intermediate crude (WTI) fell $3.06, or 4.3%, to $68.60. WTI hit a session low of $67.95 per barrel, the lowest since March 24.
The day before, both benchmarks fell 5%, their biggest daily percentage declines since early January.
On Wednesday afternoon, the Fed raised interest rates by a quarter percentage point, pressuring oil prices as traders worried that slowing economic growth could hurt energy demand.
But the Fed also signaled it could hold off on further hikes, give officials time to assess the fallout from recent bank failures, wait for a resolution to the political impasse over the US debt limit and monitor inflation.
Banking sector concerns were again in the spotlight on Monday after US regulators seized First Republic, the third major US institution to fail in two months, after JPMorgan Chase & Co seized the bank’s $173 billion in loans, $30 billion. securities and agreed to take on a loan of $92 billion. Deposit.
“The Fed going into pause mode should be very supportive of the price of oil,” said Phil Flynn, an analyst at Price Futures Group. “The big question is whether we’re going to bring down more of the banking sector or not.”
The European Central Bank is also expected to raise rates at its policy meeting on Thursday.
Also putting pressure on oil prices, government data showed US gasoline inventories unexpectedly rose by 1.7 million barrels last week. Analysts polled by Reuters had expected a decline of 1.2 million barrels. [EIA/S]
“Most remarkably, gasoline demand has returned all of the increases seen over the past weeks,” said Andrew Lipo, president of Lipo Oil Associates in Houston.
US crude inventories fell by 1.3 million barrels for the week, compared with forecasts for a decline of 1.1 million barrels.
In China, weekend data showed April manufacturing activity unexpectedly fell in the world’s biggest energy consumer and top buyer of crude.
Morgan Stanley cut its forecast for year-end Brent prices to $75 a barrel.
Referring to a boom in exports from Russia despite Western sanctions, the bank said in a note, “Downside risks to Russia’s supply and upside risks to China’s demand have largely played out and prospects for a 2H tightening have weakened.” “
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
