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A container vessel navigates through Nakhodka Bay, near the
oil terminal in the port city of Nakhodka, Russia on August 12, 2022. The photo
is credited to Tatiana Meel of REUTERS |
HOUSTON, March 10 (Reuters) - Oil prices ticked up slightly
on Friday following better-than-anticipated employment data from the United
States, although both benchmarks were still expected to fall more than 4% for
the week amid concerns over interest rate hikes. Brent climbed by 74 cents, or
0.9%, to $82.33 per barrel at 11:27 a.m. ET (16:27 GMT), while U.S. West Texas
Intermediate (WTI) crude rose by 57 cents, or 0.8%, to $76.32. Expectations of
further rate increases in the world's largest economy and in Europe have
muddied the global growth outlook, causing both crude benchmarks to plummet
approximately 4.5% this week, their largest decline since early February.
Oil prices are experiencing volatility due to concerns over
potential interest rate hikes by the Federal Reserve, resulting in a
strengthening US dollar and making oil more expensive for non-US currency
holders. Phil Flynn, an analyst at the Price Group, commented on the situation.
This uncertainty has also impacted global shares, which fell to a two-month low
as investors sold off bank stocks. US Federal Reserve Chair Jerome Powell has
warned of higher and quicker rate hikes, admitting the Fed's mistake in
initially believing that inflation was only "transitory". The Fed's
next monetary policy meeting is scheduled for March 21-22.
The nonfarm payrolls report for February in the US came in
better than expected, with 311,000 jobs added, surpassing the predicted 205,000
jobs from a Reuters survey. This could result in the Federal Reserve increasing
interest rates for a longer period, which analysts believe will put downward
pressure on oil prices. Meanwhile, major oil producers Saudi Arabia and Iran,
both members of OPEC, resumed diplomatic relations on Friday following
undisclosed talks in Beijing.
Meanwhile, it was reported that the United States had
privately encouraged some commodity traders to dismiss their concerns about
shipping Russian oil with price caps in an effort to bolster supply. Investors
are closely watching Russia's export cuts, as the country decided to reduce oil
production by 500,000 barrels per day in March. On Thursday, U.S. President Joe
Biden also unveiled a budget proposal that would eliminate billions of dollars
in subsidies for the oil and gas industry.
Source: https://reut.rs/3T4AVnI
(www.reuters.com )
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