Oil prices are turning up, and Brent crude is near $91
Oil prices turned up about 1% during trading on Thursday, with Brent crude rising near $91 a barrel, with geopolitical concerns continuing to support prices.
Oil prices were lower in early trading, with the US dollar gaining after indications that the Federal Reserve will soon tighten monetary policy in the US, the world’s largest oil user.
Dollar-denominated oil becomes more expensive for buyers using other currencies when the greenback is up.
Oil Prices Today
By 12:40 PM GMT , the price of West Texas Intermediate crude futures – for March delivery – rose by 1%, recording 88.15 dollars per barrel.
The prices of Brent crude futures – for March 2022 delivery – also rose by about 1%, recording $90.78 a barrel, after hitting $90.98 during the session.
Oil prices had reached their highest levels since October 2014, amid fears of tight supplies due to tensions between Ukraine and Russia.
“The dollar may be strong after the Federal Open Market Committee indicated that interest rates will rise,” said Vivek Dar, analyst at the Commonwealth Bank.
The dollar rose amid rising US Treasury yields; Which lifted the US dollar index, which measures the US currency against major currencies, above 97 points from its highest level in 5 weeks.
The US Federal Reserve sent signs of raising interest rates in March, as inflation accelerated.
Crude oil prices rose on Wednesday, with Brent crude rising to $90 a barrel for the first time in seven years, as tensions between Ukraine and Russia, the world’s second-largest oil producer, raised fears of disruption to Europe’s energy supplies.
Dar pointed to those concerns, explaining that efforts by OPEC and its allies, known as OPEC+, to boost supply also did not materialize and that demand was not severely affected by the rapid spread of the omicron mutate as previously feared.
OPEC did not succeed in its planned target to increase supply in December; Which highlights capacity constraints that limit supply as global demand recovers from the Corona pandemic.
OPEC + is gradually easing production cuts for 2020 as demand recovers from the collapse in demand that year, but many small producers cannot increase supplies, while others are afraid to pump too much in the event of renewed Corona setbacks.
“Ongoing supply challenges and escalating tensions between Russia and Ukraine continue to support crude oil prices,” OCBC economist Hui Li said.
However, the increase in US crude oil and gasoline inventories eased some supply concerns.
And the Energy Information Administration said, on Wednesday, that US oil stocks rose by 2.4 million barrels in the week ending January 21 to 416.2 million barrels, compared to analysts’ expectations in a Reuters poll, for a decrease of 728,000 barrels.
The Energy Information Administration said gasoline stocks rose 1.3 million barrels last week to 247.9 million barrels, the most since February 2021.
The Federal Reserve said it may be appropriate to start raising interest rates soon, with inflation rising.
“I think there is a lot of room to raise interest rates without threatening the labor market,” Fed Chairman Jerome Powell added, indicating the possibility of doing so at the next March meeting.
The Fed confirmed that it will continue to reduce asset purchases to $ 30 billion in February, ending the program by the end of next March.
Markets News :
- USD leads, CHF lags on the day
- European equities mixed; S&P 500 futures down 0.2%
- US 10-year yields down 1.1 bps to 1.835%
- Gold down 0.6% to $1,806.70
- WTI up 0.8% to $88.04
- Bitcoin up 0.7% to $36,704