Should We Say Goodbye to Oil Original Prices?
On Thursday, oil prices increased by more than $1 a barrel, building on gains from the previous session as investors’ risk appetite increased and prices were supported by declining crude stocks and a rise in gasoline demand in the United States.
After increasing $2.22 on Wednesday, September Brent crude futures increased $1.13, or 1.1 percent, to $107.75 a barrel at 0619 GMT. U.S. West Texas Intermediate oil (WTI) was trading at $98.53 a barrel, up $1.27 (1.3%) from the previous session’s $2.28 increase. According to CMC Markets analyst Tina Teng, risk sentiment has recovered from recession fears due to the ongoing U.S. earnings optimism. She also noted that a falling dollar has helped commodities prices rise.
In line with predictions, the U.S. Federal Reserve increased its benchmark overnight interest rate by three-quarters of a percentage point to reduce inflation. However, the dollar declined as investors hoped for a slower pace of rate increases. For customers in other nations, oil is more affordable when priced in dollars when the currency is lower.
What To Expect from Oil Market?
According to data, U.S. crude oil stocks decreased by 4.5 million barrels last week, below estimates of a 1-million-barrel decline, while gasoline consumption increased by 8.5 percent week over week. According to Citi analysts, the United States confirmed its position as the world’s greatest petroleum exporter as total gross exports of crude oil and processed products reached a record 10.9 million barrels per day. As WTI traded at a significant discount to Brent, making purchases of U.S. oil grades more appealing to international buyers, U.S. crude exports hit a record 4.5 million bpd.
Prices increased as much because a senior G7 official stated on Wednesday that the group’s goal is to have a price-capping mechanism on Russian oil shipments in place by December 5. According to executives this week, the expansion of U.S. crude oil output might potentially be constrained by a lack of fracking employees and equipment as well as financial limitations. Only 20% of the available gas was supplied by Russia’s primary gas pipeline to Europe, Nord stream 1.
