Brent crude futures fell to $92.79 a barrel while West Texas Intermediate crude was at $87.02 a barrel
14 September 2022 - 08:15
byIsabel Kua
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Singapore — Oil prices inched lower on Wednesday on concerns of another US Federal Reserve interest rate hike next week after consumer prices unexpectedly rose in August, outweighing support from a robust Opec oil-demand growth forecast.
Brent crude futures fell 38c, or 0.4%, to $92.79 a barrel by 4.07am GMT. US West Texas Intermediate crude was at $87.02 a barrel, down 29c, or 0.3%.
Pressuring prices was a hotter-than-expected US inflation report on Tuesday that dashed hopes that the Fed could scale back its rate policy tightening in the coming months. Fed officials are set to meet next Tuesday and Wednesday, with inflation remaining way above the US central bank’s 2% target.
“A strong US dollar and an expectation for another supersized rate hike by the Fed weighed on sentiment,” said Tina Teng, an analyst at CMC Markets.
The dollar climbed close to a 24-year peak against the yen on Wednesday. Oil is generally priced in US dollars, so a stronger greenback makes the commodity more expensive to holders of other currencies.
In China, tough ongoing Covid-19 curbs are squeezing fuel demand at the world’s largest oil importer.
“China’s zero-Covid policy remains intact and that will keep any rebounds that emerge over the coming weeks capped,” said Edward Moya, a senior market analyst at Oanda, in a note.
“The US is the big wild card and if that demand outlook weakens, oil could resume its downward trajectory that has been in place since the start of the summer.”
On the supply side, US crude stocks rose by about 6-million barrels for the week ended September 9, according to market sources citing American Petroleum Institute (API) figures on Wednesday.
The US government will release inventory data at 10.30am EDT (2.30pm GMT) on Wednesday.
Lending some support to oil prices, the Organisation of the Petroleum Exporting Countries (Opec) on Tuesday reiterated forecasts for growth in global oil demand in 2022 and 2023, citing signs that major economies were faring better than expected, despite headwinds such as surging inflation.
Oil demand will increase by 3.1-million barrels per day (bpd) in 2022 and by 2.7-million bpd in 2023, Opec said in a monthly report, leaving its forecasts unchanged from last month.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil prices dip on US rate-hike concerns
Brent crude futures fell to $92.79 a barrel while West Texas Intermediate crude was at $87.02 a barrel
Singapore — Oil prices inched lower on Wednesday on concerns of another US Federal Reserve interest rate hike next week after consumer prices unexpectedly rose in August, outweighing support from a robust Opec oil-demand growth forecast.
Brent crude futures fell 38c, or 0.4%, to $92.79 a barrel by 4.07am GMT. US West Texas Intermediate crude was at $87.02 a barrel, down 29c, or 0.3%.
Pressuring prices was a hotter-than-expected US inflation report on Tuesday that dashed hopes that the Fed could scale back its rate policy tightening in the coming months. Fed officials are set to meet next Tuesday and Wednesday, with inflation remaining way above the US central bank’s 2% target.
“A strong US dollar and an expectation for another supersized rate hike by the Fed weighed on sentiment,” said Tina Teng, an analyst at CMC Markets.
The dollar climbed close to a 24-year peak against the yen on Wednesday. Oil is generally priced in US dollars, so a stronger greenback makes the commodity more expensive to holders of other currencies.
In China, tough ongoing Covid-19 curbs are squeezing fuel demand at the world’s largest oil importer.
“China’s zero-Covid policy remains intact and that will keep any rebounds that emerge over the coming weeks capped,” said Edward Moya, a senior market analyst at Oanda, in a note.
“The US is the big wild card and if that demand outlook weakens, oil could resume its downward trajectory that has been in place since the start of the summer.”
On the supply side, US crude stocks rose by about 6-million barrels for the week ended September 9, according to market sources citing American Petroleum Institute (API) figures on Wednesday.
The US government will release inventory data at 10.30am EDT (2.30pm GMT) on Wednesday.
Lending some support to oil prices, the Organisation of the Petroleum Exporting Countries (Opec) on Tuesday reiterated forecasts for growth in global oil demand in 2022 and 2023, citing signs that major economies were faring better than expected, despite headwinds such as surging inflation.
Oil demand will increase by 3.1-million barrels per day (bpd) in 2022 and by 2.7-million bpd in 2023, Opec said in a monthly report, leaving its forecasts unchanged from last month.
Reuters
Oil prices increase as supply remains tight
Oil falls as concerns over lower China demand mount
Oil slips on China’s Covid-19 bars and rate hikes prospects
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