Oil steadies ahead of expected interest rate hikes May 3, 2023 Oil stabilizes ahead of expected interest rate hikes<br /> May 03, 2023 Creation time: 08:56 AM Last updated: 08:56 AM Views: 27 Texas, May 3 (BNA) Oil was little changed on Wednesday after hitting a five-week low in the previous session, as investors priced in expectations of rate hikes in the United States and Europe and waited for clarity on the path of future policy. Brent crude futures were up 3 cents, or 0.1%, at $75.35 a barrel by 0333 GMT, while WTI was down 3 cents, at $71.63, Reuters reported. Both benchmarks closed at their lowest since March 24 in the previous session, when they also posted the biggest one-day percentage drop since early January. “Sentiment in the oil market remains negative,” ING analysts Warren Patterson and Ewa Manthe said in a note to clients. “It appears that investors are becoming increasingly concerned about the overall outlook and its implications for oil demand.” The US Federal Reserve is expected to raise interest rates by an additional 25 basis points on Wednesday to combat inflation, while the European Central Bank is also expected to raise interest rates at its regular meeting on Thursday. Further increases could slow economic growth and hurt energy demand. “The 25 basis point rate hike has been fully priced in, so the focus will be on how Fed Chairman Jerome Powell balances between keeping the option of Fed tightening open and calming nerves around renewed banking tensions,” Yip Jun Rong, market analyst at IBM. Brokerage IG said in a note. Regulators seized First Republic Bank and sold its assets to JPMorgan Chase & Co on Monday, in a deal to resolve the biggest US bank failure since the 2008 financial crisis and put an end to the ongoing banking turmoil. In Australia, the central bank surprised markets by raising its cash rate on Tuesday and warning that further tightening may be necessary to combat soaring inflation. Meanwhile, concerns about diesel demand in recent months have pushed US heating oil futures to their lowest level since December 2021. Energy prices are also under pressure after data from China over the weekend showed manufacturing activity fell unexpectedly in April. China is the world’s largest energy consumer and largest buyer of crude oil. The International Monetary Fund said reopening China’s economy will be pivotal for Asia, as it raised its economic outlook for the region on Tuesday. But she warned of the risks of persistent inflation and global market volatility driven by the problems of the Western banking sector. Meanwhile, US crude stocks fell for the third consecutive week for the first time since December, down by about 3.9 million barrels last week, according to market sources citing American Petroleum Institute figures on Tuesday. Official inventory data from the US Energy Information Administration (EIA) is due at 10:30 AM EST on Wednesday. EIA/A. A Reuters survey found that OPEC oil production fell by 190,000 barrels per day in April, mainly driven by Iraq and Nigeria. Production is set to fall further in May as a new round of voluntary cuts unveiled on April 2 takes effect. Rial Source link Related READ MORE Sterling slips as dollar regains footing
May 03, 2023 Creation time: 08:56 AM Last updated: 08:56 AM Views: 27 Texas, May 3 (BNA) Oil was little changed on Wednesday after hitting a five-week low in the previous session, as investors priced in expectations of rate hikes in the United States and Europe and waited for clarity on the path of future policy. Brent crude futures were up 3 cents, or 0.1%, at $75.35 a barrel by 0333 GMT, while WTI was down 3 cents, at $71.63, Reuters reported. Both benchmarks closed at their lowest since March 24 in the previous session, when they also posted the biggest one-day percentage drop since early January. “Sentiment in the oil market remains negative,” ING analysts Warren Patterson and Ewa Manthe said in a note to clients. “It appears that investors are becoming increasingly concerned about the overall outlook and its implications for oil demand.” The US Federal Reserve is expected to raise interest rates by an additional 25 basis points on Wednesday to combat inflation, while the European Central Bank is also expected to raise interest rates at its regular meeting on Thursday. Further increases could slow economic growth and hurt energy demand. “The 25 basis point rate hike has been fully priced in, so the focus will be on how Fed Chairman Jerome Powell balances between keeping the option of Fed tightening open and calming nerves around renewed banking tensions,” Yip Jun Rong, market analyst at IBM. Brokerage IG said in a note. Regulators seized First Republic Bank and sold its assets to JPMorgan Chase & Co on Monday, in a deal to resolve the biggest US bank failure since the 2008 financial crisis and put an end to the ongoing banking turmoil. In Australia, the central bank surprised markets by raising its cash rate on Tuesday and warning that further tightening may be necessary to combat soaring inflation. Meanwhile, concerns about diesel demand in recent months have pushed US heating oil futures to their lowest level since December 2021. Energy prices are also under pressure after data from China over the weekend showed manufacturing activity fell unexpectedly in April. China is the world’s largest energy consumer and largest buyer of crude oil. The International Monetary Fund said reopening China’s economy will be pivotal for Asia, as it raised its economic outlook for the region on Tuesday. But she warned of the risks of persistent inflation and global market volatility driven by the problems of the Western banking sector. Meanwhile, US crude stocks fell for the third consecutive week for the first time since December, down by about 3.9 million barrels last week, according to market sources citing American Petroleum Institute figures on Tuesday. Official inventory data from the US Energy Information Administration (EIA) is due at 10:30 AM EST on Wednesday. EIA/A. A Reuters survey found that OPEC oil production fell by 190,000 barrels per day in April, mainly driven by Iraq and Nigeria. Production is set to fall further in May as a new round of voluntary cuts unveiled on April 2 takes effect. Rial
