Oil is growing after a hard bearish week
2022.12.09 09:56
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Oil is growing after a hard bearish week
Budrigannews.com – Oil prices increased on Friday, but they are still on track to finish the week at their lowest point this year and their biggest weekly drop since March due to concerns about the outlook for the global economy.
By 09:30 ET (14:30 GMT), the contract was up 0.5% to $76.55 and the futures were up 0.6% to $71.89 a barrel. However, both contracts are expected to lose about 10% per week.
Most people think that the United States will agree to raise interest rates by 50 basis points less next week. However, data released on Friday showed that inflation in the United States rose faster than anticipated in November, indicating that the central bank may have to keep interest rates higher for a longer period of time, which would slow growth in the world’s largest economy.
In a similar vein, despite the fact that the economy of the region is almost already in recession, the is expected to keep raising interest rates next week. Additionally, rising infections in China as restrictions are lifted will likely slow economic growth in the world’s largest crude importer.
Having said that, supply disruptions around the world have supported the market on Friday.
After crude leaked into a creek in the Midwest earlier this week, the Keystone oil pipeline system remained shut down on Friday, and the restart’s timing is still unknown.
According to ING analysts in a note, “The 600Mbbls/d crude oil pipeline is a major link between the oil fields in Canada and refineries in the United States.” As a result, “any prolonged disruption could result in tight oil supply in the U.S. market.”
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Additionally, despite the G7’s decision to impose a price cap on Russian crude exports, there is still a line of oil tankers being held up by Turkish authorities on their way to the Mediterranean from the Black Sea.
The number of tankers awaiting passage through Istanbul’s Bosphorus Strait was not caused by the price cap, according to the European Commission. However, Turkey has required vessels to provide proof of insurance since the beginning of the month.
According to President Vladimir Putin’s statement on Friday, Russia will react to the decision to impose a price cap, which could reduce Russian supply to an already congested market.
Putin told reporters in Bishkek, “I have already said that we simply will not sell to those countries that make such decisions.” If necessary, we will consider the possibility of…production reduction.”
Having said that, according to Bloomberg, the price cap on Russian crude in Asia seems to have little effect on the market because the price appears to be holding well above $60 a barrel.
The’s positioning data and’s rig count, which reached their highest levels since March 2020 last week, will conclude the week later.
