Oil prices fell to their lowest level in a month
The price of a barrel of Brent oil fell to $88.79, reaching its lowest level in the last month, as concerns about demand increased following statements by US Federal Reserve (Fed) officials that the increase of interest rates may continue.
The price of a barrel of Brent oil, which rose to $91.56 yesterday, ended the day at $90.92. The price of a barrel of Brent oil decreased by 2.3 percent to $88.79 at 3:21 p.m. today compared to the close. Thus, the price of a barrel of Brent oil fell to its lowest level in the last month.
At the same time, West Texas Intermediate (WTI) crude oil sold at $87.22 per barrel.
Markets are focused on the production decision from the Organization of the Petroleum Exporting Countries (OPEC) meeting today, but oil prices are at their highest level in the last month as macroeconomic data from USA, the largest oil consumer in the world. , indicates that the Fed will keep interest rates at higher levels for longer than expected, fell to its lowest level.
THE STATEMENTS OF FED OFFICIALS ARE AFFECTING
According to data announced yesterday in the US, the number of vacant positions at JOLTS exceeded market expectations by increasing by 690 thousand to 9 million 610 thousand in August compared to the previous month.
Analysts said the increase in the number of job vacancies, which is a measure of labor demand, indicates that the labor market’s strong stance continues despite the Federal Reserve’s tight monetary policy, and that markets are are focusing on ADP non-agricultural employment. data, which will be announced today and which may give a clue about the Fed’s next decision on interest rates,” he stated.
Statements by Federal Reserve officials also affect prices. Atlanta Fed President Raphael Bostic said the bank should keep interest rates high “for a long time” and predicted an interest rate cut in 2024.
US Treasury Secretary Janet Yellen said inflation had eased in the near term against the backdrop of an extremely strong labor market and that she was “very optimistic” about the outlook for the US economy.
Cleveland Fed President Loretta Mester also said interest rates could rise once again this year before remaining steady for a while.
Mester noted that risks related to inflation forecasts remain: “Despite the measures taken, inflation remains very high. We need to see the effect of inflation on prices broken. “Since consumers spend a large portion of their income in the service sector, this sector has a greater weight in inflation rates.” he said.
Stating that the multiplier effect created by rising oil prices is the biggest obstacle in the fight against inflation, Mester said: “Rising gasoline prices create fear in consumers that inflation will return. increase”. He used the expression.
The rise of the US dollar to its highest level in the last 10 months is also contributing to the decline in prices, as it reduces demand for oil from buyers using other currencies.
OPEC DECISION IS EXPECTED
Markets focused on the production decision that OPEC countries would make, but the group’s largest producers, Russia and Saudi Arabia, said in their statements before the meeting that there would be no change to current cuts.
Russian Deputy Prime Minister Aleksandr Novak said his country will review its voluntary decision to cut oil production next month.
Novak affirmed that they will continue with the cut in oil exports and said: “Russia will continue with the voluntary cut in oil exports of 300 thousand barrels per day, which came into effect in September and October, until the end of the year.” saying.
Saudi Arabia also made a similar statement, stating that it would abide by the decision to continue with the voluntary cut of 1 million barrels per day, which applies from July, until the end of December.
In the news published by the official Saudi agency SPA, based on sources from the Ministry of Energy, it is stated that the cut decision in question will be reviewed in November and may be increased if necessary. (AA)