Oil moved to growth due to supply problems
2022.12.23 01:25
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Oil moved to growth due to supply problems
Budrigannews.com – On Thursday, oil prices made gains for a fourth straight session after inventory data showed that supplies in the United States remained tight ahead of a demand-heavy holiday season. However, gains were limited due to caution ahead of key economic readings.
That decreased significantly more than anticipated in the previous week, according to data released on Wednesday. This occurred just as travel demand was expected to rise and there was a possibility of a cold snap at the end of the year.
Even though the government took out more than 3 million barrels of crude from the Strategic Petroleum Reserve, inventory drops showed that demand was still strong.
Crude prices also benefited from a weaker currency, as the yen’s rise this week put pressure on the dollar. However, ahead of important readings on and on Thursday, the dollar stabilized.
By 21:21 ET (02:21 GMT), London-traded rose 0.4% to $82.56 a barrel and 0.6% to $78.73 a barrel. With some optimism regarding a Chinese economic reopening also bolstering sentiment, both contracts are trading around 5% higher for the week.
The revised GDP data for the United States and the personal consumption expenditures (PCE) price index, which are due on Thursday and Friday, respectively, have now taken center stage. The U.S. economy is expected to grow at 2.9 percent in the second reading of the third quarter, buoyed by robust consumer spending and a robust labor market.
The PCE data, which the Federal Reserve uses as its preferred inflation gauge, will be watched more closely. Although the reading is anticipated to have decreased further from the previous month in November, it is still anticipated to remain well above the target range set by the Fed.
Fears of a likely downturn, prodded by increasing loan fees and high expansion, had battered oil costs last week, hauling them to a one-year low. Crude prices had also been affected by a slew of hawkish signals coming from major central banks.
However, due to the weakening of the dollar, crude prices later recovered from their annual lows. As the government eased its anti-COVID measures, optimism over a Chinese reopening also contributed to the success.
China’s near-term prospects are still uncertain due to a significant increase in COVID-19 cases in the world’s largest crude importer. However, markets are preparing for a recovery in Chinese demand, which, according to some analysts, could result in crude prices rising above $100 in 2023.
