BackOil prices fall nearly 1% on profit booking, concerns about higher interest rates
At 3 pm the November contract of Brent on the Intercontinental Exchange was trading at $92.60 a barrel, down 0.99% from its previous close
PremiumNew Delhi: International crude oil prices fell nearly 1% on Thursday as traders looked to book profits after the recent surge in prices. Analysts said concerns of further rate hikes by the US Federal Reserve also weighed on crude prices.
Around 3 pm the November contract of Brent on the Intercontinental Exchange was trading at $92.60 a barrel, down 0.99% from its previous close. The November contract of West Texas Intermediate (WTI) fell to $88.79 a barrel, down 0.97% from its previous close.
Ravindra Rao, head, commodity research at Kotak Securities Ltd said crude prices fell as hawkish Fed policy prompted investors to book some profits, foreshadowing signs of a tighter physical crude market.
"The EIA (US Energy Information Agency) report showed that US crude inventories fell by 2.135 million barrels last week, along with a decline in distillate and gasoline stocks, while Crude stocks at the Cushing, Oklahoma, delivery hub reported draws for a sixth consecutive week to a 5-year seasonal low. Markets await the Bank of England policy decision today, and risk sentiments might remain limited," he said.
Rahul Kalantri, vice president for commodities at Mehta Equities said: “Crude oil witnessed high volatility and extended its fall post the US Fed meeting outcome. The Fed’s comments triggered selling pressure in global commodity markets." He noted, however, that tight global supply due to OPEC+ output cuts and the decline in US oil stocks are supporting crude oil prices.
ICICI Securities said the decision to continue with the cuts of 1.3 million barrels a day (mb/d) by Saudi Arabia and Russia has created "material tightness" in global supply. It also said, "OECD oil inventories for recent months have lagged historical levels quite notably". It noted that crude demand is set to hit a new record for 2023 on the back of higher diesel demand, which could exacerbate the supply crunch.
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