Oil prices have fallen after the U.S. rate hike, but tight supply remains in the spotlight


London — Losses were limited due to tight supply, but Thursday’s oil prices wiped out the early rise the day after the fall caused by the US rate hike.

Brent crude oil futures fell 45 cents (0.4%) to $ 118.06 a barrel by 0906 GMT, while West Texas Intermediate (WTI) crude oil futures fell 44 cents to $ 114.87. Also fell 0.4%.

Both contracts remained broadly within the scope of the previous session.

Prices fell by more than 2 percent overnight after the Federal Reserve raised its key interest rate by 0.75 percent. This is the biggest increase since 1994.

The dollar index has receded from its 20-year high, relieving downward pressure on oil prices. A stronger greenback makes US dollar priced oil more expensive for holders of other currencies and reduces demand.

Investors continued to focus on tight supply as Western sanctions restricted access to Russia’s oil.

In Libya, oil production has fallen to 100,000 to 150,000 barrels (bpd) per day, a spokesman for the Ministry of Petroleum said Tuesday. This is a fraction of the 1.2 million barrels / day seen last year.

While the International Energy Agency predicts that demand will increase further in 2023, increasing by more than 2% to a record 101.6 million barrels / day, this has already hit a tight supply. Is giving.

According to the Energy Intelligence Agency, US crude oil and distillate inventories have increased and gasoline inventories have declined in the week leading up to June 10.

Still, Bernstein estimates global inventory levels with a 48-day demand cover, below the long-term average of 55 days.

By Shadia Nasralla