Oil prices rise $2 a barrel on supply concerns, weaker US dollar and initial gains for equity markets.
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Oil prices rose two dollars a barrel today, Monday
Oil prices rose $2 a barrel on Monday, supported by supply concerns, a weaker US dollar and initial gains for stock markets.
The price volatility has raised concerns that the demand for fuel may weaken if the Federal Reserve raises US interest rates at a strong pace.
Brent crude contracts, the global standard, ended the trading session up $1.95, or 1.9%, to settle at $105.15 a barrel.
US West Texas Intermediate crude contracts rose $2, or 2.1%, to settle at $96.70 a barrel.
“A slight decline in the US dollar and an improvement in stock markets are supporting oil,” said Giovanni Stonov, oil analyst at UBS.
After a strong start, US stocks turned lower in followingnoon trading, with investors cautious ahead of the US central bank meeting and results from a number of companies for growth this week.
Oil futures have been volatile in the past few weeks, with it under pressure from fears that rising interest rates may slow economic activity and fuel demand, but it is finding support from tight supply, especially since the start of the Russian military operation in Ukraine and the Western sanctions campaign once morest Moscow.
“The US and European economies are slowing, and with expectations that the Federal Reserve will raise interest rates once more this week, traders are staying very cautious,” said Dennis Kessler, vice president of trading at BOK Financial.
Federal Reserve officials indicated that “the Fed is likely to raise interest rates by 75 basis points at its meeting on July 26-27.
