By Anadolu Agency
April 28, 2023 8:09 amANKARA
Oil prices rose on Friday, fueled by demand hopes following US data showing a decline in crude oil stockpiles in the world’s largest oil-consuming country, while investors assessed the likely effects of the US Fed’s interest rate decision.
International benchmark Brent crude traded at $78.58 per barrel at 10.14 a.m. local time (0714 GMT), a 0.46% increase from the closing price of $78.22 a barrel in the previous trading session.
Simultaneously, the American benchmark West Texas Intermediate (WTI) traded at $74.97 per barrel, up 0.28% from the previous session’s close of $74.76 per barrel.
On Wednesday, data released by the US Energy Information Administration showed US oil stockpiles dropped by 5.1 million barrels to 460.9 million barrels during the week ending April 21.
Although stocks fell short of the American Petroleum Institute’s projection of a 6.08 million barrel draw, the data nonetheless showed an increase in US oil demand to put upward pressure on prices.
This development came as a welcome relief to global markets, which are plagued by demand concerns ahead of the Fed meeting to be held in the first week of May.
The US Fed made a total of 425-point interest rate increases on seven occasions last year to fight record-high inflation that climbed to the highest level in over 40 years by mid-2022.
It later raised its benchmark funds rate by 25 basis points on Feb. 1, followed by another hike of 25 basis points on March 22, bringing it to a range of 4.75% to 5%.
If the Fed implements another 25 basis point hike, as widely expected, demand concerns will intensify, pushing down prices.
Meanwhile, OPEC Secretary General Haitham Al-Ghais defended the group’s output policy decisions, saying OPEC member countries and their partners have “undertaken extraordinary efforts to stabilize the oil market in these extraordinary times, in the interests of producers, consumers, the oil industry and the wider global economy.”
His remarks came at a workshop on physical and financial energy markets attended by high-level experts.
Earlier in April, some OPEC+ countries decided to cut output by 1.6 million barrels per day (bpd) on top of their existing cuts of 2 million bpd.
Russia quickly followed suit, announcing that it would extend the existing 700,000 bpd output cuts until the end of the year.
Speaking on global energy market trends, Al-Ghais said, “On the financial side, we have been observing an accelerated trend in speculative trading, with investors and other players trading futures and options at faster rates, sometimes severely impacting market liquidity and hindering price discovery mechanisms.”
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