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WorldAsiaPossibilities to stop rising US interest rates push oil higher

Possibilities to stop rising US interest rates push oil higher

Officials from the Federal Reserve (the US central bank) on Wednesday hinted at a possible missed rate hike in June, contrary to market expectations of an imminent rate hike that would slow economic growth and weaken demand for oil.

The US House of Representatives has also approved the $31.4 trillion debt ceiling bill, increasing the chances of averting the catastrophe of the government defaulting on its debts.

For her part, market analyst at CMC Markets, Tina Teng, said: “Oil markets may have been oversold over the past two trading days on weak Chinese data and concerns over the oil market. debt ceiling… But sentiment rebounded amid passage of the debt ceiling bill through the House of Representatives, signaling a pause in US interest rate hikes. United also provided the opportunity for a higher bounce.

And Chinese government data reported on Wednesday that factory activity contracted in May to the lowest level in five months, while activity in the service sector grew at the slowest pace in four months. .

However, the Caixin Manufacturing PMI for May on Thursday showed an increase to 50.9 in May from 49.5 in April, allaying concerns about Chinese industrial demand.

On the other hand, U.S. crude oil inventories rose by about 5.2 million barrels last week, according to figures released Wednesday by the American Petroleum Institute.

Gasoline inventories also rose by about 1.9 million barrels last week, while distillate inventories rose by 1.8 million barrels, according to the Petroleum Institute.

Investors are eagerly awaiting the next June 4 meeting of OPEC+ “the Organization of the Petroleum Exporting Countries (OPEC) and its Russia-led allies,” after mixed signals so far on the likelihood of further news. discounts.

In this regard, analysts from HSBC and Goldman Sachs dismissed OPEC+’s announcement of further cuts at this meeting.

price movement

Brent crude futures for August delivery rose 60 cents, or 0.83%, to $73.20 a barrel at 0655 GMT, while U.S. West Texas Intermediate crude rose 58 cents, or 0 .85%, to $68.67 a barrel, according to Reuters data.

Both benchmarks have seen sharp declines in previous sessions, with Brent down 5.6% and West Texas down 6.3% at the close on Wednesday, compared to last Friday.

Brent crude suffered steep losses in May of around 10%, while US crude suffered monthly losses of up to 11%.

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Arab Desk
Arab Desk
The Eastern Herald’s Arab Desk validates the stories published under this byline. That includes editorials, news stories, letters to the editor, and multimedia features on easternherald.com.

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