BackOil prices up nearly 1% on bargain buying
Concerns over a steep rate hike by the US Federal Reserve continue and negative sentiments are likely to weigh on oil prices in the coming week.
PremiumNew Delhi: International crude oil prices rose nearly 1% on Friday as traders took to bargain buying after the slump in the previous session.
Around 12.55 pm, the November contract of Brent on the Intercontinental Exchange was at $91.74 per barrel, higher by 0.99% from its previous close. The October contract of West Texas Intermediate (WTI) on the NYMEX rose 0.79% to $85.77 a barrel.
Analysts said that the increase has come on the back of lower level buying. However, concerns over a steep rate hike by the US Federal Reserve continue and negative sentiments are likely to weigh on the prices in the coming week.
On Thursday, oil prices witnessed steep decline over anticipation of a weak global demand and appreciating US dollar ahead of a potentially large interest rate increase, said Sriram Iyer, senior research analyst at Reliance Securities.
“Worries of stagflation and weak China’s demand outlook also pressurized markets on Thursday," he said and added that a further downside cannot be ruled out amid recession fears.
Analysts with Nomura recently estimated that the Federal Open Market Committee, the Federal Reserve’s policy-setting committee, is likely to raise its short-term interest rate target by a full percentage point at its policy meeting next week due to the emergence of upside inflation risks.
The FOMC will announce its policy decision on 20-21 September. The rate hike by US Fed is likely to be followed by other key central banks including the European Central Bank, thereby slowing the growth rate, which eventually would impact crude demand.
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