Oct 26, 2022
VOT Research Desk
Market Insights, Considerations & Analytics
After falling by more than $1 a barrel in the early going, oil prices were able to recover on Tuesday thanks to a stronger dollar and supply concerns raised by Saudi Arabia’s energy minister.
U.S. West Texas Intermediate crude futures rose 74 cents to $85.32 while Brent crude futures rose 26 cents to $93.52 per barrel.
During the session, the benchmarks both increased and decreased by $1.
During afternoon trade, the U.S. dollar index decreased, making oil backed by the greenback less expensive for holders of other currencies and contributing to price increases.
Comments made by Saudi Arabia’s Energy Mister Prince Abdulaziz bin Salman, who claimed that energy stockpiles were being used to manipulate markets, provided additional support.
He stated at the Future Initiative Investment (FII) conference in Riyadh, “It is my duty to make clear that losing emergency stocks may be painful in the coming months.”
According to Fatih Birol, head of the International Energy Agency (IEA), tightening markets for liquefied natural gas (LNG) and supply cuts by major oil producers have placed the world in the middle of “the first truly global energy crisis.”
Phil Flynn, an analyst at Price Futures Group, stated that the remarks made by the IEA and Riyadh are “a reminder that when it comes to the energy crisis, it’s far from over.”There are still worries that the market isn’t full.”
However, oil’s gains were limited by uncertain economic activity in China and the United States, the world’s two largest oil consumers.
China’s crude oil imports in September were 2 percent lower than a year earlier, according to government data released on Monday. In October, business activity declined in the Eurozone, Britain, and the United States.
David Solomon, CEO of Goldman Sachs, stated that a recession in the United States is “most likely,” while one in Europe could also occur.
He stated at the FII conference that the U.S. Federal Reserve could raise its benchmark overnight interest rate beyond the 4.50%-4.75% range if it does not observe any real behavioral changes.
According to market sources who cited American Petroleum Institute figures on Tuesday, U.S. crude stocks increased by approximately 4.5 million barrels for the week ending Oct. 21.Distillate stocks increased by 600,000 barrels, while gasoline inventories decreased by approximately 2.3 million barrels.API/S] Data from the United States government on crude stockpiles are due on Wednesday,(today)
