On the morning of March 22, oil prices collapsed in Asian trading. Thus, as of 4:00 GMT, Brent futures fell 0.5% to $74.95 per barrel. Futures for US West Texas Intermediate (WTI) oil fell 0.6% to $69.28.
It is reported by Reuters. It is noted that the reason for the decline in prices is an unexpected increase in crude oil inventories in the United States, which “indicates a possible weakening in demand.”
“Data from the American Petroleum Institute showed that U.S. oil inventories rose by about 3.3 million barrels over the past week (March 13-19). This is contrary to analysts’ expectations for a reduction in inventories by 1.6 million barrels,” the report says.
At the same time, it is noted that markets are awaiting the results of the US Federal Reserve meeting on March 22. It is expected that, based on its results, the head of the Fed will publish new economic forecasts and ways to increase the interest rates of the central bank.
“While the market expects the Fed to raise rates by 25 basis points, some leading observers say it may hold off on further increases – or delay release of new economic forecasts – due to problems in the global banking sector. A pause in rate hikes will help stimulate economic activity and at the same time, will increase the demand for fuel,” analysts explain.
They remind: last week, oil prices suffered “the biggest fall in recent months.” The reason for this was:
- high-profile bankruptcies of American banks;
- crisis in the European bank Credit Suisse.
However, it is noted that “the emergency rescue of Credit Suisse helped restore oil prices.” And officials from OPEC+ (a cartel of oil-exporting countries, among others), hedge fund managers and oil market participants “insist that increased demand will push prices to higher levels in the coming months.”
As GLOBAL HAPPENINGS reported, meanwhile, the countries of the “Big Seven” (G7) with a high probability will not revise the price ceiling for Russian oil this week (started on March 20). Moreover, even despite the fact that the Russian Federation is now selling the resource, well below the current threshold of $60.
Source: Obozrevatel
I am a journalist who writes about economics and business. I have worked in the news industry for over 5 years, most recently as an author at Global Happenings. My work has focused on covering the economy news, and I have written extensively on topics such as unemployment rates, housing prices, and the financial crisis. I am also an avid reader and have been known to write about books that interest me.
