Oil Prices Fall Back As Traders Take Profits

Cat:

Related stories

G7 vs. the World: GDP, Population, and Military Strength

Key Takeaways G7 countries represent 28.4% of global GDP...

US drillers cut oil and gas rigs for 10th week in a row, Baker Hughes says

U.S. energy firms this week cut the number of...

Tinubu Mourns, Pays Tribute to Legendary Super Eagles Goalkeeper Peter Rufai

By Abiola Olawale President Bola Ahmed Tinubu has expressed profound...

Natasha vs Akpabio: Court Orders Senate President To Recall Senator Natasha

Warns Natasha Against inappropriate Conduct By Abiola Olawale The Federal...
  • Oil prices fell back on Wednesday morning after hitting a 10-month high earlier in the week, with WTI now trading around the $90 mark and Brent trading close to $92.
  • The drop in oil prices was driven by profit taking, as traders await a Fed decision that could play a pivotal role in defining the health of the U.S. economy.
  • The chance of the Fed hiking interest rates again hasn’t stopped multiple analysts from calling for triple-digit oil as bullish sentiment remains strong.

By Irina Slav

Crude oil prices dipped earlier today after a relentless rally that brought benchmarks to a 10-month high earlier this week.

The dip was the result of profit-taking and a pause ahead of a Fed meeting that would discuss interest rates yet again.

At the time of writing, Brent crude was trading at around $92 per barrel, after topping $95 per barrel yesterday. West Texas Intermediate was trading at a little under $90 per barrel, after topping $92 on Tuesday.

“The oil rally is taking a little break as every trader awaits a pivotal Fed decision that might tilt the scales of whether the U.S. economy has a soft or hard landing,” OANDA senior market analyst Edward Moya told Reuters.

ING, meanwhile, joined the chorus of analysts forecasting Brent’s return to $100 per barrel, “as the market continues to become increasingly concerned over the tightness in the oil balance for the remainder of the year,” the bank’s head of commodity strategy Warren Patterson and commodities strategist Ewa Manthey wrote in a note today.

Patterson and Manthey also noted this supply tightness was reflected in the forward curve on the futures market: “The curve is moving deeper into backwardation with the prompt Brent spread trading in a backwardation of close to US$1.20/bbl, up from just US$0.60/bbl at the start of last week,” they wrote.

In the U.S., oil prices have recently benefited from one extra bullish factor: the decline in crude oil inventories at Cushing, Oklahoma, which has brought total crude volumes there close to a critical minimum. The trading arm of TotalEnergies was reportedly buying up all the U.S. crude it could as a result of this tightness, sending the premium for physical U.S. crude surging.

Higher oil prices might interfere with Fed plans to stop its interest rate hikes. The Wall Street Journal noted in a report that higher oil prices would lead to higher energy bills – which would fuel inflation, which in turn could motivate the Fed to hike rates further.

NB: Irina Slav wrote this article for Oilprice.com

The New Diplomat
The New Diplomathttps://newdiplomatng.com/
At The New Diplomat, we stand for ethical journalism, press freedom, accountable Republic, and gender equity. That is why at The New Diplomat, we are committed to speaking truth to power, fostering a robust community of responsible journalism, and using high-quality polls, data, and surveys to engage the public with compelling narratives about political, business, socio-economic, environmental, and situational dynamics in Nigeria, Africa, and globally.

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

NDN
Latest News
US drillers cut oil and gas rigs for 10th week in a row, Baker Hughes saysExclusive! Tinubu Tips Late Ajimobi's Wife, Florence, Others for Ambassadorial PostsTinubu Mourns, Pays Tribute to Legendary Super Eagles Goalkeeper Peter RufaiNatasha vs Akpabio: Court Orders Senate President To Recall Senator NatashaHadi Sirika Denies Defection to ADC Coalition Rumors, Reaffirms Loyalty to Buhari, APCChina Snubs U.S. Crude for Third Month, Even as Ethane Trade RestartsHow Super Eagles Icon Peter Rufai passed Away at 61Dakuku Peterside’s Beneath the Surface Book Out in OctoberOil Prices Dip on Confirmation of Inventory BuildBuhari In Stable Condition - Ex-Aide ConfirmsBREAKING: Ex-President Buhari sick, hospitalised abroad2027: Abure, Usman Clash Over Peter Obi’s Rising Profile in ADC CoalitionMTN’s Dabengwa Tier III Cloud Data Centre: A New Era for West African Tech and AIGanduje: Why are they resigning?OPEC Reports a Global Oil Production Decline in 2024
X whatsapp