Rates continue to drag oil price

Oil prices slid on Wednesday. ICE Brent front month price went -2.5% down to settle at $111.74/b. And, NYMEX WTI closed at $106.19/b making a -3.2% decline.

Again, it is the risk of an economic slowdown in the coming months (due to the monetary tightening in developed countries and the strong inflation) that pushed oil down. The focus is not only on last week hikes, but market players are also expecting US Federal Reserve to raise rates by another 75bp in July and 50bp in September.

President Biden asked Congress to suspend the federal tax on gasoline for three months and called states to do the same thing on state taxes. The level of these state taxes on gasoline is ¢38.69/gal on average. However, this pause, and the result of lower gasoline prices could also boost gasoline demand and push prices up.

The API figures showed that crude inventory rose by 5.6mb and gasoline inventory by 1.2mb. The EIA is facing technical issues and the release of the weekly inventory report is delayed until next week.

For the moment oil is moving down: ICE Brent trades -1.2% lower.

Share this news :

You might also read :

ES-oil
January 11, 2022

Venezuelan recovery

ICE Brent front-month continued to trade above 81 $/b, despite improving supply conditions in Kazakhstan and Lybia. Both countries are ramping up their crude production and should…
ES-power
October 18, 2021

EUAs retreated alongside the gas market

Despite a strong retreat of clean gas costs, the European power spot prices rose towards 200€/MWh for today, buoyed by forecasts of rather weak wind…
ES-oil
May 28, 2021

Crude oil prices sharply on the rise

Brent 1st-nearby prices have neared the key level of $70/b this morning. Expectations of higher oil output from OPEC+ producers and the potential comeback of…
Join EnergyScan

Get more analysis and data with our Premium subscription

Ask for a free trial here

Don’t have an account yet? 

[booked-calendar]