Oil traded near $69, with prices tussling between a hawkish rate outlook from central banks and positive signals from the world’s largest economy.
(Bloomberg) — Oil traded near $69, with prices tussling between a hawkish rate outlook from central banks and positive signals from the world’s largest economy.
West Texas Intermediate fell 0.2% after closing 2.8% higher in the previous session. Federal Reserve Chair Jerome Powell said at least two interest-rate increases are likely necessary this year to keep bringing inflation lower, the latest central bank commentary suggesting further tightening to come.
US data on Thursday showed a resilient economy and jobs market, underscoring the likelihood that the Federal Reserve will keep raising interest rates. The dollar gained, making commodities priced in the US currency less attractive.
US crude inventories shrank by 9.6 million barrels last week, the largest draw 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.
The US benchmark is still on track for its first back-to-back quarterly decline since 2019 as China’s lackluster economic recovery and aggressive monetary tightening by the Federal Reserve weighed on prices. Supply has also been plentiful, bolstered by resilient exports from Russia, despite sanctions.
“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 Ltd.
To get Bloomberg’s Energy Daily newsletter direct into your inbox, click here.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.