Oil rises on anticipation of a more non-aggressive US rate hike
Oil prices rose on anticipation of a less aggressive US rate hike, but concerns about a recovery in demand capped gains.
Brent crude futures for September delivery rose 94 cents, or 1.0%, to $100.04 as of 0630 GMT, while WTI crude rose 63 cents, or 0.7%, to $96.41 a barrel.
Oil is trading heavily to the rhythm of Federal Reserve policy and its effects on both demand destruction and the US dollar. With the market falling from 100 basis points to 75 basis points, oil prices and the market will have a chance to breathe a little more.
The Fed's hawkish policymakers are backing another 75 basis point rate hike, rather than larger rates, at the US central bank's policy meeting this month.
Rate hike uncertainty and weak economic data pushed both oil contracts on Thursday below their February 23 closing level, a day before Russia invaded Ukraine.
Still, both Brent and WTI recovered almost all their losses at the end of the trading session. However, concerns about the demand outlook continue to restrain oil prices.
The renewed COVID-19 outbreaks threatening demand in China haven't helped the sensibility. The high prices evitably blunt the global demand for gasoline.
China's refinery output in June shrank nearly 10% year-on-year, while production in the first half of the year fell 6%, the first year-on-year decline since at least 2011, data showed on Friday.
Meanwhile, the US President will fly to Saudi Arabia today, where he will attend the Gulf allies summit and call for them to pump more oil.
However, the reserve capacity of members of the Organization of the Petroleum Exporting Countries is dwindling, most producers are pumping the crude at maximum capacity, and it is unclear how much extra product Saudi Arabia can bring into the market quickly.
Related Articles
Oil prices are rising as supply concerns increase amid expectations of a prolonged conflict in the Middle East
Oil prices continued to rise following US and Iranian attacks on ships serving their respective purposes
Oil prices closed higher this week following renewed US-Iran hostilities
