Oil Does Little As Rate-Cut Anticipation Balances Demand Fears
Bloomberg
Published Aug 22, 2019 02:13PM ET
Updated Aug 22, 2019 06:35PM ET
Oil Does Little As Rate-Cut Anticipation Balances Demand Fears
(Bloomberg) -- Oil erased losses as investors anticipated that the Federal Reserve would signal an interest rate cut Friday.
Futures were back above $55 a barrel on Friday after falling as much as 1.1%. Traders are balancing fears about slowing economies in Europe and China and demand concerns in the U.S.
Investors are anticipating Federal Reserve Chair Jerome Powell will signal a rate cut is coming during a speech Friday at a Wyoming conference.
“The market has been shifting to focus on global demand from U.S. trade policy,” said Judith Dwarkin, chief economist at Calgary-based consultant RS Energy.
Oil has fallen 17% since touching a high for the year in late April. Worldwide demand for petroleum-derived fuels to power trucks, trains, airplanes and ships has been imperiled by a protracted trade war between the U.S. and China. Efforts by Saudi Arabia and its producer allies to boost prices by restraining supplies haven’t borne fruit in the face of surging output from American shale fields.
A key gauge of industrial activity in the world’s largest economy declined for the first time in almost a decade. Meanwhile, a U.S. Federal Reserve bank president threw cold water on expectations of an imminent interest-rate cut.
“The more forward-looking components of the economic data fell more sharply into contraction, further reviving the recession fears that have concerned the market the past few weeks,” said Daniel Ghali, a commodity strategist at TD Securities in Toronto.
West Texas Intermediate crude for October delivery fell 9 cents to $55.58 a barrel at 2:09 p.m. on the New York Mercantile Exchange.
Brent for October settlement was down 14 cents to $60.17 on the ICE (NYSE:ICE) Futures Europe Exchange. The global benchmark traded at a premium of $4.62 to WTI.
The drop in U.S. crude inventories last week was overshadowed by a 2.61 million-barrel increase in stored supplies of diesel and other distillates, heightening demand concerns.
See also: Fed’s Three Reasons for Cutting in July Support Another Move
Get The News You Want
Written By: Bloomberg
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.