Oil heads for weekly loss on rate hike worries, ample supply

London, Feb. 17 (BNA): Oil fell 3% on Friday and was on track for a weekly decline, weighed down by concerns about a US Federal Reserve rate hike that could hit demand, and signs of oversupply.

Two Federal Reserve officials warned Thursday that additional increases in borrowing costs are necessary to bring inflation down to desirable levels. Reuters reported that growing expectations of a rate hike boosted the US dollar, making oil more expensive for holders of other currencies.

Brent crude futures fell $2.55, or 3%, to $82.59 a barrel by 1310 GMT, while US West Texas Intermediate crude fell $2.33, or 3%, to $76.16.

Both benchmarks were heading for a weekly decline of more than 4%.

“The tensions over interest rate hikes are back with a vengeance,” said Stephen Brennock of oil brokerage PVM.

Various indicators also affected the abundance of supply on the market.

Russian oil producers expect to maintain current volumes of crude oil exports, despite the government’s plan to cut oil production in March, newspaper Vedomosti said on Friday, citing sources familiar with the companies’ plans.

The latest snapshot of US supplies, released on Wednesday, showed that crude stocks in the week ending February 10 rose 16.3 million barrels to 471.4 million barrels, the highest level since June 2021.

Some support came from moves this week by the International Energy Agency and the Organization of the Petroleum Exporting Countries to raise their forecasts for global oil demand growth this year, citing expectations of an increase in Chinese demand.

READ MORE  Oil falls as banking concerns persist, Fed rate hike

The Saudi energy minister said the current agreement between OPEC+, which groups OPEC producers with Russia and others, to cut oil production targets by 2 million barrels per day, would remain closed until the end of the year, adding that he remained cautious about the Chinese. Requests.







Source link

Leave a Comment