Oil prices fall on dollar strength ahead of Fed rate hike

Oil fell as the dollar strengthened ahead of central bank meetings this week, expected to prompt further monetary tightening.

est Texas Intermediate traded near $85 a barrel after giving up an earlier gain of more than 1 percent. The dollar is trading near a record, making commodity prices less attractive in the currency. A series of central bank decisions from the US to Europe and Asia are planned in a global assault on inflation.

Crude oil rallied earlier in the session following the reopening of China’s Chengdu, the largest city to shut down since Shanghai’s two-month lockdown earlier this year. Still, concerns about a global slowdown have weakened energy demand and pushed oil prices on course for their first quarterly decline in more than two years.

“The biggest cause of fluctuations in oil prices is adjustments in demand expectations,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore. “An easing of the lockdown in China would definitely gain more traction. There is some catching up to do, which would explain the initial knee-jerk reaction.”

High energy prices threaten to plunge Europe into a painful recession, and governments in the region are taking steps to shore up energy supplies. Germany on Friday seized the local unit of Russian oil major Rosneft as Berlin seeks to seize sweeping control of its energy industry and break decades of dependence on Moscow for fuel.

The gap between prompt Brent crude futures and the second month contract — a measure of how the market signals near-term supply and demand tightness — remains in a bullish backwardation pattern. The spread was $1.38 a barrel compared to $1.07 a week ago.

Iranian President Ebrahim Raisi said he needed guarantees that the US would not back away from a nuclear deal as a condition for the Middle East country to strike a deal. A deal would herald the return of Iranian crude to a parched oil market, though negotiators remain divided.

Meanwhile, loading and export operations at Iraq’s Basra oil terminal returned to normal levels after technicians and engineering teams finished dealing with an oil spill, state-owned Basra Oil said over the weekend. Thursday’s incident forced a halt to exports from the plant.

https://www.independent.ie/business/world/oil-price-falls-due-to-dollar-strength-ahead-of-fed-hike-41999530.html Oil prices fall on dollar strength ahead of Fed rate hike

Fry Electronics Team

Fry Electronics.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@fry-electronics.com. The content will be deleted within 24 hours.

Related Articles

Back to top button