Sunday, June 4, 2023

Texas oil opens below US$70, after losing 3.35%

Texas Intermediate Oil Price (WTI) It opened this Wednesday with a drop of 3.35%, to US$69.26 a barrel, falling below US$70, just one day after losing the US$75 barrier, while today it is expected that the US Federal Reserve (Fed) announce a new rise in interest rates.

At 9:00 a.m. local time (1:00 p.m. GMT), the contracts WTI futures for June delivery had US$2.40 remaining from the close of the previous day.

He Petroleum The US benchmark has been down for four consecutive days and yesterday it sank 5.3% due to the financial unrest caused by the bank’s collapse First Republic and that yesterday also weighed down the main Wall Street indices.

He also gave in for fear of a slowdown in China and because of the jitters ahead of the Fed’s announcement of its interest rate policy decision today.

most of analysts are of the opinion that the Fed will announce a new rate hike 25 points bases to leave interest rates between 5 and 5.25%, their highest value in 16 years.

“WTI crude oil futures fell a 5.31% due to the resurgence of fears that another banking crisis is looming”, the analyst pointed out this morning Tom Essaye in your letter to clients.

The firm’s analyst Oanda Craig Erlamconsiders that “the warning signs indicate that investors are very concerned about the global economic outlook, especially in the US, and the data they are catching up little by little, which should discourage the Fed from raising rates today,” although he acknowledges that it will most likely raise rates.

“It is possible that the United States is heading towards the recession and it may not be the only one, which does not bode well for crude demand,” Erlam concluded.

For his part, Slobodan Drvenicadirector of the Information and Analysis Department at Windsor Brokers, noted that analysts are watching the Fed’s announcement today and Thursday’s European Central Bank.

“Both central banks are expected to raise the interest rates and investors will be watching for signs of the Fed’s future policy path, as signs of a further rise in the cost of the loans would have a greater negative impact on the growth economic and would hurt demand,” he said in an analysis published in Fxstreet.


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