Oil prices fall for fourth straight day as US rate hike prospects emerge
May 23 – Oil prices eased for a fourth straight session on Thursday after U.S. Federal Reserve meeting minutes revealed talks of further tightening of interest rates if inflation holds. Air, a move that could hurt oil demand.
Brent crude futures were down 46 cents, or 0.6 percent, at $81.44 a barrel at 0424 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 54 cents, or 0.7 percent, at $77.03. Both benchmarks fell more than 1% on Wednesday.
Minutes from the Federal Reserve’s last policy meeting released Wednesday showed that the U.S. central bank’s response to sticky inflation will include keeping its policy rate “on hold” for now but discussed possible further hikes. There is also reflection.
“Various participants mentioned a desire to further tighten policy to address inflationary risks in a way that would justify such action,” the Fed’s meeting minutes said.
Higher interest rates raise the cost of borrowing, a shortage of funds that could slow economic growth and oil demand in the world’s biggest oil-consuming nation.
Also weighing on the market, U.S. crude inventories rose 1.8 million barrels last week, compared with estimates of a draw of 2.5 million barrels, according to the Energy Information Administration.
Globally, physical crude markets have been under pressure recently due to soft refinery demand and ample supply.
Analysts said in a note on Thursday that the recent softening of the market was due to weak data, including rising oil inventories, strong demand, and weakening refinery margins and the growing risk of run cuts.
Russia said it exceeded its OPEC+ production quota in April for “technical reasons” and will soon present its plan to the Organization of the Petroleum Exporting Countries (OPEC) secretariat to compensate for the mistake. , the Russian Energy Ministry said late on Wednesday.
Citi said it still expects OPEC+, which brings together OPEC and the alliance led by Russia, to maintain its output cuts through the third quarter of this year when it meets on June 1. will be
Citi also said it sees Brent averaging $86 a barrel in the second quarter of 2024.