Third consecutive day of declines for international oil prices on Thursday, as the messages of more intensive monetary policy tightening coming from the US Federal Reserve increase the possibility of a “brake” on economic growth, while millions of barrels of strategic reserves dozens of countries are released to the market.
The global benchmark, Brent oil delivery June fell 49 cents to close at $ 100.58 a barrel, while on the other side of the Atlantic, the American WTI crude delivery in May closed down 20 cents at $ 96.03 a barrel.
Brent even fell briefly below the psychological threshold of $ 100 a barrel. for the first time since March 17.
According to an announcement by the International Energy Agency on Wednesday, countries allied with the US will “throw” in the market 60 million barrels of their strategic reserves within the next six months. The US will release 180 million barrels during the same period.
On the supply side, oil traders are weighing the effects of the Fed’s “hard” turn in trying to control inflation. The US dollar rose for the seventh consecutive day, making commodities valued in the US currency less attractive to investors.
Statements by Fed executives indicate that the central bank could move very aggressively towards tightening in the next 1-2 meetings of its monetary policy committee, says Ed Moya, senior market analyst at Oanda. “This could lead to lower risk for all assets, including commodities such as oil.”
Despite the recent decline, the overall picture still shows “tightness” in supply, says Stewart Glickman, an analyst at CFRA Research, based in New York. “The inability to replace Russian oil is particularly burdensome on the markets,” he said, referring to short-term solutions that the IEA and the United States are trying to implement, but a situation that is expected to last too long.
Source: Capital
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