Oil futures fell on Friday, with US benchmark prices hitting their lowest level in more than two weeks.
Another Fed official poured cold water on the prospects of a near-term interest rate cut, raising concerns about the economy and oil demand, while a rise in the number of active US oil rigs fueled expectations of higher domestic production.
Price movement
-
West Texas Intermediate crude oil for April delivery CL00,
-2.46% every.1,
-2.46% 24kg,
-2.46%
The price of oil fell by $2.12, or 2.7%, to settle at $76.49 per barrel on the New York Mercantile Exchange. Front-month contract prices saw a weekly decline of 2.5% and settled at their lowest level since February 8, according to Dow Jones market data. -
Brent crude oil for April BRN00,
+0.19% BRNG 24,
+0.17% ,
The global index lost $2.05, or nearly 2.5%, to $81.62 a barrel on the ICE Futures Europe exchange. Brent fell 2.2% over the course of the week, closing at its lowest levels since February 14. -
March gasoline RBH24,
-2.43%
fell 2.5% to $2.28 per gallon, ending a 2.5% decline for the week, while HOH24 heating oil for March fell,
-2.37%
It fell 2.3% to $2.69 a gallon, losing 4.2% for the week. -
Natural gas delivery in March NGH24,
-8.03%
It settled at $1.60 per million British thermal units, down about 7.5% on Friday to post a weekly loss of 0.4%.
Market driving factors
Federal Reserve Governor Chris Waller said late Thursday that there is “no rush” to cut interest rates in the wake of stronger-than-expected inflation and economic data since the beginning of the year. Waller and other Fed officials have made a concerted effort in the past few weeks to back away from Wall Street's previous expectations of an interest rate cut as early as March.
The strong data “provides the Fed with more room to maintain its restrictive monetary policy for an extended period. This dynamic constrains economic growth and indicates lower demand for oil in the future, contributing to lower prices,” Ricardo Evangelista, senior analyst at Active Trades, said in a note. .
“However, the downside to the barrel price remains limited due to supply-side concerns stemming from the ongoing geopolitical turmoil in the Middle East,” he added.
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But in the United States, a rise in the number of active oil drilling rigs signaled the potential for further gains in domestic production already at record levels.
Baker Hughes BKR,
The number of US oil rigs rose by six this week to 503, after two oil rigs fell the previous week, the newspaper reported Friday.
Overall, analysts this week were “chasing price action rather than predicting it,” due to “price action being volatile without a clear direction,” Stephen Innes, managing partner at SPI Asset Management, told MarketWatch.
““Factors impacting oil markets include the US macroeconomic landscape, China's recent reduction of its key loan rate (LPR), tight market dynamics versus OPEC excess capacity concerns, rising US oil production versus OPEC compliance, and ongoing geopolitical tensions in the Middle East. '.“
“The complex web of factors impacting oil markets includes the complex US macroeconomic landscape, China's recent cut of its key loan rate (LPR), tight market dynamics versus OPEC's fears of excess capacity, rising US oil production versus OPEC compliance, and issues… Continuing.” He said that the geopolitical tensions in the Middle East. “So, the headline noise generated by these changing narratives creates too many moving images to form a salient view of the market in the short term.”
Concerns about rising inventories, rising inflation and disappointing US economic indicators last week have capped oil prices and overall risk sentiment, Innes said.
However, some optimism in the market this week is partly attributable to strong economic data and “broader risk sentiment.” He added that regardless of unexpected supply shocks or escalation in the Middle East that stifles production, “we can probably stay within range” in the second half of the year.
