Bombers pump oil at an oil field on the Caspian Sea in Baku, Azerbaijan, October 5, 2017. REUTERS / Grigory Dukor
Register now for FREE and unlimited access to Reuters.com
Sign up
NEW YORK, July 14 (Reuters) – Oil prices fell on Thursday, but reduced almost all losses after falling more than $ 4 earlier in the session as investors focused on the outlook. a large rate hike in the United States later this month that could curb inflation, but at the same time affected oil demand.
September Brent crude futures fell 47 cents, or 0.5%, to $ 99.10 a barrel and ended a third straight session below $ 100.
U.S. crude West Texas Intermediate for delivery in August fell $ 95.78 a barrel, or 0.5%, with a 52-cent drop.
Register now for FREE and unlimited access to Reuters.com
Sign up
Both contracts reached lows on Thursday, which were below the February 23 close, the day before Russia invaded Ukraine, with Brent reaching its lowest level since February 21.
The U.S. Federal Reserve is seen boosting its battle with 40-year high inflation with an oversized 100 basis point rate hike this month after a report on inflation showed that price pressures are accelerating . The Fed’s policy meeting is scheduled for July 26-27.
The Fed’s rate hike is expected to follow a similar move by the Bank of Canada that shocked the market on Wednesday.
“Fed moves will have a disproportionate impact on the market as we watch them try to digest new economic data on inflation,” said John Kilduff, a partner at Again Capital LLC in New York.
Oil prices have fallen over the past two weeks due to recession concerns despite falling crude and refined exports from Russia amid Western sanctions and disruption of supply to Libya. Read more
Investors also turned to the dollar, often seen as an asset haven. The dollar index hit a 20-year high on Wednesday, making oil purchases more expensive for non-US buyers, but fell a bit on Thursday.
“Technical indicators suggest another round of new lows as the U.S. dollar continues to dominate the direction of the oil price,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois.
In Europe, signals were also bearish on demand, as the European Commission cut its forecast for economic growth and raised the forecast inflation rate to 7.6%. Read more
Concerns about curbing COVID-19 in several Chinese cities to curb new cases of a highly infectious subvariant have also kept a cap on oil prices.
China’s daily crude imports in June sank to their lowest level since July 2018, as refineries envisioned blocking measures to curb demand, customs data showed on Wednesday.
Data from the U.S. Energy Information Administration also point to a decline in demand, with a drop in products supplied to 18.7 million barrels per day, the lowest since June 2021. Stocks crude oil rose, bolstered by another major release of strategic reserves. Read more
U.S. President Joe Biden will fly to Saudi Arabia on Friday, where he will attend a summit of Gulf allies and call for more oil to be pumped.
However, the Organization of the Petroleum Exporting Countries’ surplus capacity is running out, with most producers pumping to full capacity, and it is unclear how much more Saudi Arabia can quickly bring to market. Read more
Register now for FREE and unlimited access to Reuters.com
Sign up
Report by Laura Sanicola in New York Additional report by Julia Payne in London and Florence Tan in Singapore Edited by Jason Neely, Matthew Lewis and Diane Craft
Our standards: the principles of trust of Thomson Reuters.