Tuesday’s comments from the Federal Reserve Chairman, Jerome Powellthey were seen as less harsh than feared, boosting risk appetite and weighing on the dollar. A weaker greenback makes oil cheaper for holders of other currencies.
“It looks like traders had gotten a little more defensive in anticipation of a change in stance, but Powell refrained from making the jump,” he said. Craig ErlamOANDA analyst, speaking to Reuters.
With less aggressive rate hikes in the United States, the market expects the world’s largest economy to avoid a sharp economic slowdown or even a recession that would affect the demand for oil, while the reopening of china after ending COVID restrictions will also boost fuel use.
“The imminent increase in demand for oil and the meager growth in world supply will guarantee that the oil balance will tighten in the coming months,” he said. Stephen Brennock, from the PVM brokerage.
Also, the earthquake that shook Turkey and Syria on Monday interrupted the flows of crude from Iraq and Azerbaijan from Ceyhan, although the Iraqi pipeline to the export center resumed its flows the day before.
Regarding the offer, OPEC and its allies, known as OPEC+decided last week to maintain production limits and An Iranian official said on Wednesday that the group would likely stick with its current policy. at their next meeting to support oil prices.
The Iranian representative of OPEC, Afshin Javan, He highlighted that international prices could rise to 100 dollars per barrel, as Chinese activity recovers.
“I think OPEC is moving in the right directionJavan told reporters on the sidelines of India Energy Week, referring to the group’s decision in December to cut output.
OPEC+, an alliance that includes members of the Organization of the Petroleum Exporting Countries (OPEC) and others including Russia, agreed last year to cut its production target by 2 million barrels per day (bpd), about 2%. of global demand, from November to the end of 2023 to support the market.
“OPEC did it because I wasn’t very optimistic about demand”Javan said, adding that China’s reopening will boost demand.
Source: Ambito
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