-Advertisement-

-Advertisement-

Oil Prices Set for a Weekly Decline as Fed Signals Caution Over Rate Cuts

Source The Ghana Report

Crude oil prices look set to end the week with a modest loss after two Federal Reserve governors on Thursday said there will be no rush with rate cuts.

The central bank should wait at least another two months before it cuts rates to make sure the recent rise in inflation is a temporary one and not the beginning of a new upward trend, Governor Christopher Waller said, as quoted by Reuters.

“I would like to have greater confidence that inflation is converging to 2% before beginning to cut the policy rate,” another Fed Governor, Lisa Cook said, as quoted by Investopedia.

Minnesota Fed President Neel Kashkari, meanwhile, separately said that consumers still feel prices are too high, suggesting he shares the cautious sentiment of Cook and Waller towards potentially premature rate cuts.

All this weighed on prices since higher interest rates keep all prices high and affect demand for energy, including oil. However, the impact was muted because the effect of the above updates was countered by lower OPEC output and the risk premium from Houthi attacks on ships in the Red Sea.

“Strong-enough oil demand juxtaposed with weak Chinese macroeconomic data has been a recurring theme,” Michael Tran, analyst at RBC Capital Markets, said in a note, as quoted by Bloomberg. “So far, fundamental signals have been a mixed bag.”

What is perhaps of note this week is the fact that prices moved higher on Thursday even though the Energy Information Administration confirmed an inventory build, which was the second one in as many weeks.

Normally, this would weaken prices but not this week, which suggests concern about supply may be starting to draw more attention from traders. At the same time, weak economic data from key markets such as China, the UK, and Japan, has negative implications for demand growth, which has served to moderate the effect of supply concern on prices.

Leave A Comment

Your email address will not be published.

You might also like
where to buy viagra buy generic 100mg viagra online
buy amoxicillin online can you buy amoxicillin over the counter
buy ivermectin online buy ivermectin for humans
viagra before and after photos how long does viagra last
buy viagra online where can i buy viagra