New York West Texas Intermediate (WTI) crude futures closed for the second straight day on Wednesday (March 8) as investors continued to worry regarding the Federal Reserve’s aggressive rate hike. (Fed) will affect the economy and demand for oil. Such concerns overshadowed the positive factor from a more-than-expected drop in US crude inventories last week.
The WTI crude oil contract is delivered in April. It was down 92 cents, or 1.19%, at $76.66 a barrel.
The Brent crude oil contract (BRENT) is delivered in May. She was down 63 cents, or 0.76%, at $82.66 a barrel.
Crude futures continued to be under pressure as Fed Chairman Jerome Powell signaled a rate hike. In addressing Congress on the 2nd yesterday, Mr Powell stressed that The Fed will speed up raising interest rates to curb inflation.
However, Mr Powell said The Fed has yet to decide on the size of the rate hike at its March meeting. The Fed will take into account information received regarding the labor market and inflation. If the data suggests the Fed will raise interest rates faster. The Fed is ready to speed up the rate hike.
Concerns regarding the impact of the Fed’s acceleration in interest rates have overshadowed the positive from a U.S. Energy Information Administration (EIA) report that said U.S. crude stockpiles fell 1.7 million barrels last week. The 700,000 barrel increase was expected by analysts.
Barclays lowers its oil price forecast for this year. It cited a larger increase in Russian crude oil production than previously expected.
Barclays forecasts Brent and WTI crude oil prices this year at $92/barrel and $87/barrel, respectively. Down from $98/barrel and $94/barrel respectively.
However, Barclays warned that the market might face a shortage of 500,000 bpd in the second half of the year. due to increased demand from China following the country has been fully opened While the expansion of non-OPEC oil production may slow down.
