Oil prices increased on Wednesday for a second day, reversing recent declines as the U.S. currency weakened after recent gains, U.S. fuel inventory reports revealed greater-than-anticipated drawdowns, and consumer demand increased.
At $89.32 per barrel,
Brent crude futures closed up $3.05, or 3.5%. West Texas Intermediate (WTI) crude futures for the United States ended the day up $3.65, or 4.7%, to $82.15 per barrel.
Oil prices, which fell by more than 22% during the third quarter, may be bottoming out, according to analysts, as U.S. sales of strategic reserves come to an end and Chinese demand appears to be picking up.
we are bottoming market will remain extremely volatile
I do believe we are bottoming, but the market will remain extremely volatile and difficult to speculate in, according to Rebecca Babin, senior energy trader at CIBC Private Wealth US.
In spite of refining product supply remaining 3% lower over the past four weeks compared to the same period a year earlier, U.S. inventory data revealed that consumer demand had recovered.
In the most recent week, U.S. crude stocks fell by 215,000 barrels, gasoline inventories fell by 2.4 million barrels, and distillate inventories fell by 2.9 million barrels as refinery output decreased as a result of several outages.
dollar -driven rallies accross the board
These are all dollar-driven rallies across the board,” said Eli Tesfaye, senior market strategist at RJO Futures. “All raw material dominated currencies are up – crude is not just moving in isolation here.”
Eli Tesfaye, senior market strategist at RJO Futures, claimed that all of these rallies were driven by the dollar in all markets. “All currencies that are dominated by raw materials are up; crude is not simply going here alone.”
Due to anticipated weaker demand and a stronger U.S. dollar, Goldman Sachs lowered its oil price projection for 2023 on Tuesday. However, it added that global supply shortfalls only strengthened its long-term bullish outlook.
england announced it will intervene in the bond market
After the Bank of England announced it will intervene in the bond market to stop a damaging rise in borrowing costs on Wednesday, investors’ fears of a financial system-wide contagion were allayed. Global equities recovered from two-year lows.
