Oil fell further in three months as Federal Reserve Chairman Jerome Powell doubled his determination to curb higher inflation in decades with more aggressive rate hikes.
West Texas Intermediate was down $ 109.56, down 6.8%, the biggest daily drop since March. Powell this week openly approved for the first time raising interest rates to restrictive territory, a strategy that has often led to an economic recession and could reduce energy consumption. On Friday, he reiterated that the Fed is focused on returning inflation to its 2% target.
“All headlines seem to have gone down in terms of oil and this could lead to more technical sales targeting $ 100 psychological per barrel,” said Edward Moya, senior market analyst at Oanda.
“Once this lower move is completed, oil should stabilize and trade comfortably above the $ 100 a barrel, as possible interruptions of new sanctions on Russian oil or the off-season. hurricanes will keep supplies at dangerously low levels, “he said.
Fears that rising interest rates and a slowdown in economic growth will lead to the destruction of demand have taken hold of the market, but in the long run, supplies still seem tight, market participants said.
“I don’t think sales will continue because we have significant supply shortfalls, such as non-OPEC and U.S. production and OPEC surplus capacity; The fundamentals for energy remain We are optimistic and recommend buying the downloads, “said Christyan Malek, JPMorgan’s Chief Energy Officer.
Russia’s invasion of Ukraine has raised world prices and helped raise the cost of everything from food to fuel. Retail gasoline prices in the United States have broken records repeatedly and the national average has recently surpassed $ 5 per gallon. The White House is weighing limits on fuel exports in an attempt to alleviate the pain in the bomb.
Crude oil continues to rise by more than 50% this year, as rising demand is combined with altered trade flows after the Russian invasion of Ukraine to squeeze the market. All commodity price movements have become more extreme as market liquidity has sunk and if crude oil falls under Western secondary sanctions, oil could rise sharply, analysts at JPMorgan Chase & Co. wrote. ., including Natasha Kaneva, in a report.
Prices
- WTI for July delivery fell $ 8.03 to close $ 109.56 a barrel
- Brent for the August liquidation lost $ 6.69 to settle at $ 113.12 a barrel.
As the war in Ukraine continues, attention continues to the extent to which Russian oil flows will be disrupted. On Friday, the country’s Deputy Prime Minister Alexander Novak said yields at the country’s refineries could fall 10 percent this year.