Oil prices rise ahead of inventory data
2023.01.05 07:55
Oil prices rise ahead of inventory data
Budrigannews.com – After a series of sharp declines on Thursday, investors looked for a possible slowdown in U.S. interest rate hikes. Now, they are focusing on weekly inventory data to see how much oil was consumed at the end of the year.
In the first two trading days of 2023, rising COVID-19 cases in China and an International Monetary Fund warning about a possible recession fueled concerns about lagging demand. Crude prices fell between 4% and 7%.
However, after the Federal Reserve’s December meeting revealed that policymakers unanimously support a slower rate hike pace in 2023, markets experienced some relief. This indicates that interest rate increases will place less immediate pressure on economic activity.
by 21:11 ET (02:11 GMT), it had increased 1.3 percent to $73.75 a barrel, or 0.8 percent, to $78.68 a barrel. After falling as much as 5%, both contracts recovered from a three-week low on Wednesday.
Nevertheless, the minutes demonstrated that Fed policymakers were in favor of keeping interest rates higher for a longer period of time, which could impede economic expansion in the long run.
showed on Wednesday that in the last week of December, crude inventories in the United States increased by 3.3 million barrels. However, it appeared that the majority of this rise was caused by ongoing releases from the Strategic Petroleum Reserve, indicating that overall fuel consumption remained high throughout the holiday season.
Analysts anticipate a 1.2 million increase in inventories, which will likely be reflected in the API reading later on Thursday. But are anticipated to have decreased, which is a crucial indicator of consumer demand.
Concerns that rising COVID-19 cases in China will delay an economic reopening in the world’s largest oil importer were largely responsible for recent selling in crude markets. After relaxing a number of COVID prevention measures in December, the nation is currently experiencing its worst outbreak to date.
According to this week’s data, the country’s population continued to fall in December. However, the indicates that the cessation of anti-COVID measures was facilitating some economic activity recovery.
Still, analysts cautioned that the country’s rising number of infections could put pressure on business activity and cause high volatility in the coming months.
Crude markets were also affected by worries about a slowdown in global economic activity, especially after the International Monetary Fund predicted a recession in major economies this year. That contracted more than anticipated in December, according to data released on Wednesday.
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