2023-07-07 19:47:06
Oil prices climbed to their highest level in two months on Friday as the slight easing in the US job market shed fears that the US central bank might overdo it on rate hikes to the point of stalling the economy. ‘economy.
But lingering concerns regarding weakening demand are slowing its rise with announcements of supply cuts from Russia and Saudi Arabia.
Brent crude from the North Sea for September delivery climbed 2.54% to $78.47.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for August delivery, gained 2.86% to 73.86 dollars.
US job creations remained strong but rose less than expected to 209,000 in June.
“This suggests that the US Federal Reserve (Fed) may not keep interest rates high for as long as expected, which alleviates the impact this might have on energy demand,” Andy commented. Lipow of Lipow Oil Associates.
But the oil market also remains concerned regarding persistent supply cuts, which is driving prices up.
“Prices have risen lately in response to Saudi Arabia’s extension of production cuts while Russian exports have fallen,” Lipow said.
On Tuesday, Saudi Arabia and Russia, two major crude-producing countries, announced cuts in their supply.
“This comes at the same time as a continued decline in US oil inventories,” said the analyst, while commercial crude reserves in the United States fell by 1.5 million barrels last week following – 9.6 million barrels the week before.
Faced with what appears to be a shortfall in supply, many economic indicators are simultaneously fueling persistent fears of weakening demand.
In China, activity in services grew in June but at one of the weakest rates of the year, the latest sign of the country’s post-Covid recovery running out of steam.
“In the two other major (oil) demanding regions, the United States and Western Europe, the still high levels of inflation are forcing the Fed and the ECB (European Central Bank) to raise key interest rates even further. , despite the massive increases already made,” said Carsten Fritsch of Commerzbank.
These increases should have “an impact on economic development”, he continues, indicating that economists at Commerzbank expect the United States and the euro zone to enter recession during the second half of the year.
1688761351
#Oil #twomonth #high
