2023-06-29 17:56:58
Oil prices varied, Thursday, following dealers’ psyches fell between the hammer of fears that rising interest rates would cause weak global economic growth and weak demand for oil, and the anvil of the larger-than-expected decline in US crude stocks.
Brent and Nymex crude rose by regarding three percent, on Wednesday, following US Energy Information Administration data showed a decline in crude inventories by 9.6 million barrels in the week ending June 23, which far exceeded analysts’ expectations in a Archyde.com poll, with inventories declining by 1.8 million barrels. .
Investors are concerned regarding the rise in interest rates and its consequences on economic growth, especially following Jerome Powell, Chairman of the US Federal Reserve, confirmed that he expects to continue taking decisions on raising interest rates at a moderate pace in the coming months.
Jerome Powell confirmed, on Wednesday, that a recession in the United States following the decision to raise interest rates is not the most likely possibility, but it is “certainly possible.”
“The least likely case is that we find our way to a better balance without a really severe recession,” he added.
But he added that there is also a “high probability of a slowdown,” adding that the US economy is enjoying a great deal of strength.
On the other hand, the number of Americans who submitted new applications for unemployment benefits fell last week, to the lowest level in 20 months, which paints an optimistic picture of the labor market, which might confirm the continuation of the US Federal Reserve in raising interest rates to reduce demand.
“Oil traders are confused by rising interest rates with fears of a global recession, in exchange for increased demand for travel and declining crude supplies,” said Dennis Kessler, vice president of trading at BOK Financial.
On the other hand, Christine Lagarde, President of the European Central Bank, reinforced expectations of raising interest rates in the Eurozone for the ninth consecutive time in July.
Contributing to increasing pressure on oil prices, the continued decline in annual profits of industrial companies in China, the second largest oil consumer in the world, during the first five months of the year, as the decline in demand affected profit margins.
The head of the Federal Reserve is threatening to raise interest rates twice before the end of the year
price movements
During a session that witnessed a rise and a decline in oil prices, Brent crude futures rose 18 cents, or 0.24 percent, to $ 74.42 a barrel, by 17:45 GMT.
Nymex crude futures rose 21 cents, or 0.29 percent, to $69.75 a barrel.
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