NextGen Day

Concerns over demand caused oil prices to decline steadily on Friday. The US Federal Reserve (Fed) signaled additional rate increases after increasing its benchmark interest rate by 25 basis points as investors awaited the release of China’s industrial production statistics.

At 09:37 a.m. local time (06:37 GMT), the price of international benchmark Brent crude was $82.12 per barrel, down 0.06 percent from the previous trading session’s closing price of $82.17 per barrel.

American benchmark West Texas Intermediate (WTI), which completed the previous session at $75.88 per barrel, was trading at $75.75 per barrel at the same time, down 0.17 percent.

In a report sent via email, commodity strategist Daniel Hynes of Australia and New Zealand Banking Group stated that crude oil “was basically stable as the market awaits indications of higher demand from China.”

During the Lunar New Year holidays, there was a substantial spike in traffic on the nation’s roads.

The 15 major cities’ combined congestion index also revealed a weekly increase of more than 200 percent.

Hynes continued, “Chinese traders have been comparatively absent from markets despite this fast growth in mobility.

After the US Fed raised its benchmark interest rate by 25 basis points on Wednesday in an effort to combat inflation, prices started to decline.

The Fed issued a statement saying, “Inflation has moderated somewhat but remains elevated.”

The US Federal Reserve increased the interest rate 7 times last year for a total increase of 425 basis points.

Fed Chair Jerome Powell stated that he anticipates the Federal Open Market Committee to keep raising interest rates.

We predict continued hikes because, in our opinion, our current level of policy restraint is insufficient, he said.

“It would be hasty to declare success at this point when inflation is still the greatest it has been in 40 years. Our objective is to reduce inflation, “Added he.

US crude oil inventories unexpectedly increased, adding to the downward pressure and indicating weak demand.

Energy Information Administration (EIA) statistics issued late Wednesday showed that US commercial crude oil stockpiles grew by 4.1 million barrels during the week ending January 27.

Contrary to the market’s estimate of a fall of almost 1 million barrels, inventories increased to 452.7 million barrels.

The higher-than-anticipated growth in stocks indicates a decline in US demand, which restrains the rise in oil prices.

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