Oil getting cheaper due to weak demand
2023.02.22 02:24
Oil getting cheaper due to weak demand
By Ray Johnson
Budrigannews.com – The U.S. Federal Reserve is expected to indicate that it will continue to raise interest rates in comments due later, raising concerns of lower global economic growth and fuel demand, which extended oil prices’ losses on Wednesday.
After experiencing a decline of 1.2 percent on Tuesday, futures for April delivery fell by 23 cents to $82.82 a barrel by 0420 GMT. West Texas Middle (WTI) unrefined fates for April declined 21 pennies to $76.15 a barrel. On Tuesday, the March WTI contract came to an end, down 18 cents.
After recent data showed that employment and consumer prices in the United States were higher than anticipated, traders will be able to get a sense of how high officials are projecting interest rates going forward when the minutes of the most recent meeting of the Federal Reserve are released on Wednesday.
Oil that is priced in dollars becomes more expensive for holders of other currencies when interest rates rise. USD/] Nonetheless, other economic reports from the United States, the largest oil consumer in the world, revealed some troubling signs. Deals of existing homes fell in January to their least since October 2010, the twelfth month to month drop, which is the longest streak starting around 1999.
Serena Huang, head of APAC analysis for Vortexa, stated, “Growing recessionary concerns are keeping a lid on oil prices, but the market is cautiously optimistic on China’s demand recovery, especially in gasoline and jet fuel.”
On Tuesday, a preliminary poll of analysts conducted by Reuters revealed a rise in inventories, which exacerbated concerns about demand. However, the overall price decline was mitigated by expectations of tighter global supplies and rising Chinese demand. In order to meet the rising demand for transportation fuel and the opening of new refineries, analysts anticipate that China’s oil imports will reach a record high in 2023.
After the government ended its zero-COVID policy, which kept people at home for nearly three years, this comes as China expects its tourism market to flourish this year, beginning with a busy and robust summer travel season.
Daniel Hynes, senior commodity strategist at ANZ Bank, noted in a note on Wednesday that state-owned PetroChina and Unipec had booked ten supertankers to import approximately 20 million barrels of crude oil from the United States next month. China imports the most oil in the world.
