Oil prices below $80/bbl amid economic concerns, rate hike fears
PremiumInvestors are assessing the impact of the latest sanctions on Russia, including a price cap and a European Union embargo on seaborne imports of Russian oil, analysts said
New Delhi: International crude oil prices continued to trade below the $80 per barrel level on Wednesday amid concerns of weak economic indicators from China and Europe along with anticipation of hike in interest rates by central banks globally.
Around 1.45 pm, the February contract of Brent on the Intercontinental Exchange was trading at $79.51 per barrel, higher by 0.20% from its previous close. The January contract of West Texas Intermediate (WTI) on the NYMEX was at $74.24 per barrel, lower by just 0.01% from its previous close.
Ravindra Rao, head of commodity research at Kotak Securities: “Crude has been struggling amid demand worries in the largest oil importer nation China amid surging Covid cases. Additionally, aggressive stance by Fed on Interest rate hikes has added to the bearishness.“
As per the API report on Tuesday, crude oil stocks in the US fell sharply by 6.4 million barrels for the week ended December 2, he added. However, the data also showed a rise in both gasoline and distillate stocks by about 5.9 million barrels and 3.6 million barrels respectively.
Rahul Kalantri, vice president for commodities at Mehta Equities noted that the sentiments remained clouded over concerns of weak global demand. Developed economies, especially the US and Europe, are witnessing a drop in manufacturing activity due to tightening financial conditions, he added.
“Investors are also assessing the impact of the latest sanctions on Russia, including a price cap and a European Union embargo on seaborne imports of Russian oil. We expect crude oil prices to remain volatile in today’s session," Kalantri said.
