Thu, May 23, 2024

Will The Uptrend in The Oil Market Continue?

Oil prices

Tuesday saw a slight increase in oil prices as OPEC+ continued to produce less than their quotas. However, prices were still on track to decline for a fourth consecutive month due to expectations of another increase in U.S. interest rates, which could slow economic growth and fuel demand.

At 0939 GMT, the price of Brent oil futures for November settlement had increased by 41 cents, or 0.5%, to $92.41 a barrel. American WTI crude for October delivery was up 9 cents at $85.82 a barrel. The more active November contract was $85.53, up 17 cents, or 0.2%, as the October contract neared its Tuesday expiration date.

Tuesday saw a slight increase in oil prices as OPEC and its allies continued to produce less than their quotas. However, prices were still on track to decline for a fourth consecutive month due to expectations of another increase in U.S. interest rates, which could slow economic growth and fuel demand. At 0939 GMT, the price of Brent oil futures for November settlement had increased by 41 cents, or 0.5%, to $92.41 a barrel.

Outlook on Global Oil Markets

In order to control inflation, the U.S. Fed should increase interest rates by another 75 basis points on Wednesday.

China, the second-largest consumer of oil in the world, maintained its benchmark lending rates steady on Tuesday as it seeks to weigh supporting its slow economic development against the falling yuan while other major countries are tightening. On Thursday, the BoE will reveal interest rates.

Concerns about a sharp deterioration in the global economy and pressure on crude oil prices continue to fuel concerns about aggressive central bank tightening, said Edward Moya, senior market analyst at OANDA.

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