Washington, Feb. 22 (BNA) Oil prices extended losses on Wednesday amid expectations that the US Federal Reserve is likely to indicate that it will continue to raise interest rates in comments to be issued later, raising fears of slowing global economic growth and increasing demand.
Brent crude futures for April delivery fell 23 cents to $82.82 a barrel by 0420 GMT, after posting a 1.2% drop on Tuesday.
April West Texas Intermediate (WTI) crude futures fell 21 cents to $76.15 a barrel. Reuters reported that the March WTI contract ended down 18 cents on Tuesday.
The US Federal Reserve will release the minutes of its latest meeting on Wednesday, which will give traders a glimpse into how top officials expect interest rates after recent data showed stronger-than-expected US labor and consumer prices.
Higher interest rates tend to push up the dollar, making dollar-denominated oil more expensive for holders of other currencies.
Other economic reports from the United States, the world’s largest oil consumer, showed some worrying signs. Existing home sales in January fell to their lowest level since October 2010, the 12th monthly decline — the longest streak since 1999.
“Increasing recession fears are keeping oil prices in check, but the market is cautiously optimistic about a recovery in demand in China especially in gasoline and jet fuel,” said Serena Huang, head of Asia Pacific analysis at Vortexa.
On Tuesday, a preliminary poll of Reuters analysts also showed a rise in US crude stocks, exacerbating demand concerns.
However, expectations of dwindling global supplies and increased demand from China mitigated overall price weakness. Analysts expect China’s oil imports to reach a record level in 2023 to meet growing demand for transportation fuels and as new refineries come online.
It comes as China expects its tourism market to boom this year, starting with a busy and robust summer travel season as travelers flock to holiday destinations after the government ended a coronavirus policy that kept people at home for nearly three years.
In a note on Wednesday, Daniel Hynes, chief commodities strategist at ANZ Bank, cited state-owned PetroChina and Unipec booking 10 VLCCs to import oil from the US next month, the equivalent of about 20 million barrels of crude oil, as signs of rising demand. chinese. . China is the largest importer of oil in the world.