Oil rose as the dollar declined and investors weighed the demand outlook following another interest-rate hike from the Federal Reserve.
West Texas Intermediate traded near $84 a barrel after falling over the past two sessions. The dollar dipped and US equity futures turned higher, spurring more positive sentiment in crude early on Thursday.
Those moves came despite Fed Chair Jerome Powell vowing that officials would crush inflation after they boosted rates by 75 basis points for a third straight time.
Thin liquidity has exacerbated price swings for oil, leading to wild volatility at times. Crude remains on track for its first quarterly decline in more than two years on concerns that demand may be crimped by an economic slowdown, but for most of September prices have been largely rangebound.
“There are so many inputs this week the market almost seems indecisive from where to take its cue,” said Harry Altham, an analyst at brokerage StoneX. Today’s move came as the Japanese yen firmed “on the back of intervention by the central bank, which has seen dollar weakness and inflows into commodities.”
- WTI for November delivery rose 1.1 per cent to $83.87 a barrel at 10:19 a.m. in London.
- Brent for November settlement gained 0.9 per cent to $90.67 a barrel.
Data this week showed that signs of economic slowdown are mounting, as US gasoline and diesel demand fell to the lowest seasonal levels in more than a decade. The Energy Information Administration also reported nationwide US crude stockpiles and those at the key storage hub at Cushing, Oklahoma expanded last week.
“Demand was already being tempered by China’s intermittent lockdowns, while the macroeconomic outlook is deteriorating faster than expected in Europe and high prices are denting US demand,” Citigroup Inc. analysts said in a note dated Sept. 21. Recession concerns are weighing on sentiment, they added.
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