Menu
BW CFO World
Community for Finance Professionals, Consultants and allied businesses
  • Home
  • News
  • Videos
  • Articles
    • Credit & Capital
    • Economic Trends
    • Financial Compliance
    • Financial Leadership
    • Financial Management
    • Financial Reporting
    • Financial Strategy
    • Risk Management
    • Taxation
  • Featured
  • Nominate for Awards
Close Menu
20211130_093209-2
July 26, 2022

Oil Steady As Market Juggles Fed Hike With Supply Fears

Urvi Srivastava Credit & Capital, Economic Trends fed hike, interest rate, Markets, oil, oil futures, traders

Oil futures have been volatile in recent weeks as traders have tried to reconcile the possibilities of further interest rate hikes

Oil prices were relatively steady on Monday as the market balanced supply fears with expectations that rise in U.S. interest rates would weaken fuel demand. Brent crude futures for September settlement rose 27 cents, or 0.26 per cent, to $103.47 a barrel by 0909 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 8 cents, or 0.08%, to USD 94.78 a barrel.

Oil futures have been volatile in recent weeks as traders have tried to reconcile the possibilities of further interest rate hikes, which could limit economic activity and thus cut fuel demand growth, against tight supply from disruptions in trading of Russian barrels because of Western sanctions amid the Ukraine conflict. “Rising recession fears globally do suggest that gains are likely to be limited in the shorter term, geopolitics aside,” said Jeffrey Halley, a senior market analyst at OANDA.

Officials at the Fed have indicated that the central bank would likely raise rates by 75 basis points at its July 26-27 meeting. China, the world’s second-biggest economy, narrowly missed a contraction in the second quarter, growing just 0.4% year-on-year, weighed down by COVID-19 lockdowns, a weak property sector and cautious consumer sentiment. 

But steep backwardation between inter-month spreads continue to signal near-term supply tightness. In a backwardated market, front-month prices are higher than those in future months. The spread settled at $4.82/bbl on Friday, an all-time high when excluding expiry-related spikes in the two previous months. Libya’s National Oil Corporation (NOC) aims to bring back production to 1.2 million barrels per day (bpd) in two weeks, from around 860,000 bpd, NOC said in a statement early on Saturday.

But analysts expect Libya’s output to remain volatile as tensions are still high. Continued tight supply also follows “expectations that Russian oil supply will edge lower in the months ahead as widely-expected plans for a price cap on Russian oil may have the opposite effect on oil prices than hoped for,” said Warren Patterson, head of commodities strategy at ING.

The European Union said last week that it would allow Russian state-owned companies to ship oil to third countries under an adjustment of sanctions agreed by member states last week aimed at limiting the risks to global energy security. However, Russian Central Bank Governor Elvira Nabiullina said on Friday that Russia would not supply oil to countries that decided to impose a price cap on its oil. 

(Reuters)

Urvi Shrivastav

→ Urvi Shrivastav

Tech Mahindra Q1 FY23 Revenues Up 24.6% YoY RBI ‘Correct’ To Use Forex Reserves To Tackle Rupee Volatility: Economic Adviser

Related Posts

Credit & Capital, Economic Trends

Zerodha Faces Snag In Early Trade, Issue Resolved

20211201_100953

Credit & Capital, Economic Trends

Department Of Telecom Extends Spectrum Payment Date To August 17

20220812_102211

Credit & Capital, Economic Trends

Southern Petrochemicals Reports Q1 PAT At Rs 66.85 Cr

Movements

  • adobe danDan Durn Appointed As Adobe’s New Chief Financial Officer
  • Vineet Mahajan_Vineet Mahajan Appointed As New CFO Of Avanse Financial Services On Sept 27
  • bharat pet director financeVetsa Ramakrishna Gupta To Lead Bharat Petroleum As Director Finance
  • tender cuts cfoTenderCuts Names Satya Rakesh as New CFO
  • dailmer CFOManish Thakore Helms Daimler India Commercial Vehicles as CFO

Selected Stories

  • Zerodha Faces Snag In Early Trade, Issue Resolved

    Read more

  • 20211201_100953Department Of Telecom Extends Spectrum Payment Date To August 17

    Read more

  • 20220812_102211Southern Petrochemicals Reports Q1 PAT At Rs 66.85 Cr

    Read more

  • Twitter Plan To Fight Midterm Misinformation Falls Short, Say Voting Rights Experts

    Read more

  • rupeeRupee Opens Tad Lower; Retail Inflation Data, Flows Eyed

    Read more

Categories

  • Accounting
  • CFO Stance
  • Credit & Capital
  • Economic Trends
  • Featured
  • Financial Compliance
  • Financial Leadership
  • Financial Management
  • Financial Reporting
  • Financial Strategy
  • Financial Technologies
  • Global News
  • Interview
  • Movements
  • Risk Management
  • Taxation

Recent Comments

    Back To Top
    BW CFO World
    • Home
    • News
    • Videos
    • Articles
      • Credit & Capital
      • Economic Trends
      • Financial Compliance
      • Financial Leadership
      • Financial Management
      • Financial Reporting
      • Financial Strategy
      • Risk Management
      • Taxation
    • Featured
    • Nominate for Awards
    © Copyright BW BUSINESSWORLD 2018. All Rights Reserved.