Oil set for weekly loss as China’s concern, Hawkish Fed takes toll
Oil set for weekly loss as China’s concern, Hawkish Fed takes toll

Oil set for weekly loss as China’s concern, Hawkish Fed takes toll

(Bloomberg) – Oil is heading for its third weekly loss out of four due to concerns about declining energy demand in virus-affected China and signals from the Federal Reserve that monetary policy will be tightened aggressively to curb inflation.

West Texas Intermediate fell to $ 103 per share. barrel in early trade in Asia and is more than 3% lower this week. China, the world’s largest crude oil importer, has imposed a series of roadblocks on key urban centers to eradicate Covid-19. The restrictions have damaged mobility and slowed economic growth.

Investors are preparing for the US Federal Reserve to raise interest rates with a quick cut, with President Jerome Powell signaling two or more half-percentage point increases in comments on Thursday. The pivot has raised the dollar, making commodities more expensive for holders of other currencies.

Oil is still more than 35% higher this year despite the recent weakness as the fallout from Moscow’s invasion of Ukraine continues to rattle the markets and cause crude oil to rise. There are calls for the EU to ban Russian oil, similar steps taken by the US and UK Support for prices has also come from disruptions to supplies from Libya amid a wave of protests.

As part of a strategy to curb inflation and curb gasoline prices, US President Joe Biden has ordered a major release of crude oil from national stocks. Twelve companies were allocated all of the 30 million barrels offered from the strategic petroleum reserve in the second sale, the energy ministry said Thursday. These are marked for May-July delivery.

© 2022 Bloomberg LP


Leave a Reply

Your email address will not be published.