International Crude Oil Prices Decline by 1% Amidst Profit Booking.

International Crude Oil Prices Decline by 1% Amidst Profit Booking.
International Crude Oil Prices Decline by 1% Amidst Profit Booking.
International Crude Oil Prices Decline by 1% Amidst Profit Booking.
International Crude Oil Prices Decline by 1% Amidst Profit Booking.

International Crude Oil Prices Decline by 1% Amidst Profit Booking.

International Crude Oil Prices Decline by 1% Amidst Profit Booking.

Crude Market Reaction to Hawkish Fed Policy

In a recent development, international crude oil prices experienced a nearly 1% decline, primarily driven by traders looking to secure profits following a significant surge in prices. This downward movement in the oil market was further exacerbated by apprehensions of potential interest rate hikes by the US Federal Reserve. Analysts and experts in the field of commodities have been closely monitoring these developments, shedding light on the various factors contributing to this shift.

Around 3 pm on Thursday, the November contract of Brent on the Intercontinental Exchange was trading at $92.60 per barrel, marking a 0.99% decrease from its previous close. Similarly, the November contract of West Texas Intermediate (WTI) dropped to $88.79 per barrel, down by 0.97% from its previous close.

Hawkish Fed Policy and Its Impact on Crude Prices

Ravindra Rao, the Head of Commodity Research at Kotak Securities Ltd, explained that crude oil prices experienced a downturn due to the hawkish stance of the US Federal Reserve, which prompted investors to lock in some profits. This shift in investor sentiment is indicative of the potential for a tighter physical crude market in the near future.

He added, “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.

Sai Silks Kalamandir IPO Opens for Subscription: Key Details

“Volatility Triggered by US Fed Meeting Outcome

Rahul Kalantri, the Vice President for Commodities at Mehta Equities, highlighted that crude oil witnessed high volatility and extended its decline following the US Federal Reserve meeting outcome. The Fed’s comments created selling pressure in global commodity markets. However, he also noted that tight global supply, driven by OPEC+ output cuts and the declining US oil stocks, continues to support crude oil prices.

Material Tightness in Global Supply and Record Demand in 2023

ICICI Securities emphasized that Saudi Arabia and Russia’s decision to persist with production cuts of 1.3 million barrels a day (mb/d) has resulted in “material tightness” in the global supply of oil. Additionally, they pointed out that OECD oil inventories for recent months have fallen significantly below historical levels. The forecast for 2023 indicates that crude demand is set to reach a new record, largely attributed to increased diesel demand, potentially exacerbating the ongoing supply crunch.

Facebook
Twitter
LinkedIn
Telegram
WhatsApp
Email
Note: You have to fill-up above all respective field, then click below button for send your message