Oil prices rise due to bad weather in U.S.
2022.12.21 01:33
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Oil prices rise due to bad weather in U.S.
Budrigannews.com – Although concerns about adverse weather conditions weighed on the outlook for demand in the near future, data indicating a larger-than-expected weekly draw in U.S. inventories led to an increase in oil prices on Wednesday.
The week ending December 16th saw a larger-than-anticipated drop in U.S. inventories of 3 million barrels, according to data from the. Later in the day, inventories are expected to decrease by 1.7 million barrels. The interruptions in supply brought on by the Keystone pipeline’s temporary shutdown coincide with the decrease in inventories.
By 20:43 ET (01:43 GMT), London-traded rose 0.4% to $80.10 a barrel, extending gains into a third consecutive session, while $76.32 a barrel rose 0.1%.
This week’s weakening of crude prices was good for them, especially since the for the first time in nearly a decade it changed its ultra-dovish policy. The move helped the and brought the dollar close to its lowest level in six months, which is good news for commodities that are priced in the greenback.
A commitment by the United States government to begin refilling its Strategic Petroleum Reserve in February helped prices as well, signaling a buy signal to markets.
However, a storm’s worsening outlook in the midwest of the United States pointed to potential travel disruptions during the end-of-year holidays, which could further reduce fuel demand. With the Keystone pipeline’s complete restart in sight, supplies in the United States are also expected to rise.
The world’s largest oil consumer’s weak fuel demand was also demonstrated by rising gasoline inventories.
Even though oil prices increased in recent sessions, they are still suffering significant losses this year as concerns about a possible recession in 2023 were fueled by rising interest rates and high inflation.
Even though the BOJ’s change in policy hurt the dollar, it shows that nearly all major central banks in developed markets are getting ready to tighten policy in 2023, which could hurt crude demand even more.
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Hawkish signs from the , , and the had shaken rough business sectors last week. Additionally, crude is anticipated to be impacted in the near future by uncertainty regarding China’s economic reopening as the nation battles an increase in COVID-19 cases.
