Home Business News Oil prices on hold due to global uncertainties

Oil prices on hold due to global uncertainties

by LLB Finance Reporter
12th Apr 23 10:33 am

While OPEC+’s decision to reduce crude production levels has translated into higher baseline prices, it has failed to lead to a consistent uptrend. Oil prices remained on a horizontal trend for the last couple of days with limited performances on one side or the other.

Doubts over demand levels have strongly affected price expectations. The slowdown in economic growth in the US could continue to pull demand to the downside in particular with economic indicators continually missing estimates.

The current trend in interest rate hikes could also be a significantly important factor for oil consumption as it could lead to a weaker economy, a more pessimistic sentiment among households and lower purchasing power.

Daniel Takieddine, CEO MENA at BDSwiss said, “However, concerns around the US banking sector and possibly a credit crunch could play in favor of a softer monetary policy and could push the Federal Reserve to reconsider. A change in policy could leave breathing room for the economy and oil prices.

“Another important market to consider is China, where below-expectations manufacturing activity has been subduing oil demand projections. The country is the world’s largest oil importer and could drive crude prices up if its economy recovers more strongly.

“In this regard, weaker-than-expected inflation figures could entice the Chinese government to take additional measures to boost the economy. Inflation in the country remains below the central bank’s target, contrary to Western markets where authorities have been struggling with elevated inflation for some time now.

“Oil markets could see some volatility after the release of the US Energy Information Administration outlook as well as the American Petroleum Institute’s inventory levels. Traders could also monitor other economic data to determine changes in monetary policy and their impact on demand levels. Tomorrow’s US inflation figures could also have an important impact on prices and outlook.”

Leave a Comment

You may also like

CLOSE AD

Sign up to our daily news alerts

[ms-form id=1]