Oil slipped from a three-month high as US crude stockpiles fell less than anticipated and traders awaited the Federal Reserve’s interest-rate decision.
(Bloomberg) — Oil slipped from a three-month high as US crude stockpiles fell less than anticipated and traders awaited the Federal Reserve’s interest-rate decision.
West Texas Intermediate slipped near $79 a barrel as stockpiles declined only 600,000 barrels. However, losses were limited as inventories at the nation’s largest storage hub continue to hover at the lowest since May. Technicals are also capping crude’s recent gains as oil settled in overbought territory on its nine-day relative strength index for a second day on Tuesday.
Crude’s rally in recent sessions has been fueled by strength in equity markets, signs that the global crude market is starting to tighten and moves by China’s leadership to revive economic growth.
Oil has pushed higher in July as supply cuts from OPEC+ heavyweights Saudi Arabia and Russia help drain global inventories. That move has offset the drag from Federal Reserve Chair Jerome Powell’s campaign of monetary tightening, which is expected to continue later Wednesday with another rate increase to the highest in 22 years.
Yet even as inflation is seen cooling, the price of gasoline is starting to surge everywhere. Futures just soared to a nine-month high in New York, sending shock waves through to the pump as motor fuel markets have tightened worldwide. The resurgence in gasoline potentially poses a headache for central banks including the Fed as policymakers grapple with the problem of how much more monetary tightening is needed to bring inflation to heel.
Read more: Gasoline Is Surging All Over the World in Fresh Inflation Blow
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