Dubai: Oil prices fluctuated in a choppy session as a hawkish rate outlook from central banks undercut positive signals from the world’s largest economy.
US data on Thursday showed a resilient economy and jobs market, signaling potentially strong demand for crude. But the reports also raise the likelihood that the Federal Reserve will keep boosting interest rates. US equities pared most gains after rallying earlier in the session.
Keeping a lid on prices is the hawkish rate outlook from central banks. Federal Reserve Chair Jerome Powell said at least two interest-rate increases are likely necessary this year to keep bringing inflation lower.
Read more
- Saudi Aramco sees ‘sound’ oil outlook in second half of 2023 on China, India demand
- Aramco, TotalEnergies sign $11 billion contract to build petrochemicals complex in Saudi Arabia
- UAE: Petrol, diesel prices for July 2023 announced
- Abu Dhabi’s ADNOC awards Petrofac $700 million contract for new gas compressor plant
US benchmark crude is on track for its first back-to-back quarterly decline since 2019 on China’s lackluster economic recovery and the Federal Reserve’s aggressive monetary tightening. Supply has also been plentiful, bolstered by resilient exports from Russia, despite sanctions.
US crude inventories shrank by 9.6 million barrels last week, the largest drawdown in more than a month, according to the Energy Information Administration. Gasoline demand averaged over a four-week period surged to the highest since 2021.
“If US stocks keep falling because of healthy worldwide demand for domestic grades and possibly buoyant US gasoline consumption as the driving season kicks off, it might just be the harbinger of what to expect in coming months,” said Tamas Varga, an analyst at brokerage PVM Oil Associates.
