Oil holds ground as rate hike fears offset China demand hopes
Brent crude futures fall 12c but on track for a weekly gain of 0.7%
21 October 2022 - 07:29
byStephanie Kelly and Florence Tan
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Oil prices were near flat on Friday, as optimism about a possible rise in energy demand in China faded and the market weighed concerns about steep inflation.
Brent crude futures lost 12c to trade at $92.26 a barrel by 2.19am GMT. US West Texas Intermediate futures fell 4c to $84.47 a barrel.
Brent was on track for a weekly gain of 0.7%, while WTI was expected to fall 1.3% after a rollover in front-month contracts.
To fight inflation, the US Federal Reserve is trying to slow the economy and will keep raising its short-term rate target, Federal Reserve Bank of Philadelphia president Patrick Harker said on Thursday.
“With several key Fed members taking turns at the hawk’s pulpit this week arguing for even higher interest rates, it blunted optimism from China’s reduced quarantine hopes,” Stephen Innes, MD at SPI Asset Management said in a note.
“Everyone is pining for a China-reopening-driven commodity boost, but we are not there yet.”
Beijing is considering cutting the quarantine period for visitors to seven days from 10 days, Bloomberg news reported on Thursday, citing people familiar with the matter. There has been no official confirmation from Beijing.
China, the world’s largest crude importer, has stuck to strict Covid-19 curbs this year, which weighed heavily on business and economic activity, lowering demand for fuel.
A looming EU ban on Russian crude and oil products, as well as the output cut from the Opec and allies including Russia, known as Opec+, have supported prices recently.
Opec+ agreed on a production cut of 2-million barrels per day in early October.
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 holds ground as rate hike fears offset China demand hopes
Brent crude futures fall 12c but on track for a weekly gain of 0.7%
Oil prices were near flat on Friday, as optimism about a possible rise in energy demand in China faded and the market weighed concerns about steep inflation.
Brent crude futures lost 12c to trade at $92.26 a barrel by 2.19am GMT. US West Texas Intermediate futures fell 4c to $84.47 a barrel.
Brent was on track for a weekly gain of 0.7%, while WTI was expected to fall 1.3% after a rollover in front-month contracts.
To fight inflation, the US Federal Reserve is trying to slow the economy and will keep raising its short-term rate target, Federal Reserve Bank of Philadelphia president Patrick Harker said on Thursday.
“With several key Fed members taking turns at the hawk’s pulpit this week arguing for even higher interest rates, it blunted optimism from China’s reduced quarantine hopes,” Stephen Innes, MD at SPI Asset Management said in a note.
“Everyone is pining for a China-reopening-driven commodity boost, but we are not there yet.”
Beijing is considering cutting the quarantine period for visitors to seven days from 10 days, Bloomberg news reported on Thursday, citing people familiar with the matter. There has been no official confirmation from Beijing.
China, the world’s largest crude importer, has stuck to strict Covid-19 curbs this year, which weighed heavily on business and economic activity, lowering demand for fuel.
A looming EU ban on Russian crude and oil products, as well as the output cut from the Opec and allies including Russia, known as Opec+, have supported prices recently.
Opec+ agreed on a production cut of 2-million barrels per day in early October.
Reuters
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