Oil prices fall after Fed hints at Dec rate hike
[LONDON] Crude oil futures fell on Thursday as the dollar strengthened on signs the Federal Reserve may raise US interest rates in December.
US crude was down 55 cents at US$45.39 a barrel at 1000 GMT. Brent crude fell 58 cents to US$48.47 a barrel.
The dollar held strong near 2-1/2-month highs against the euro on Thursday, after the Fed signalled it may not wait until next year to raise rates, highlighting the divergent monetary policies of the world's most influential central banks. "In just a couple of weeks the Fed seems to be less concerned about China and expectations are therefore again rising for an interest rate hike in December," Petromatrix consultancy's Oliver Jakob said.
On Wednesday, Brent and US crude rose by 5-6 per cent - a rally that analysts struggled to explain even after US government data showed a draw in total stocks. "The US weekly report can be taken on the positive side but the rally of yesterday started before the release of the weekly report and was a sub one-minute affair during which crude oil gained more than US$1 per barrel," Jakob said. "We are not sure what was behind that one-minute flash surge but it was definitively an unusual trading pattern." US crude stocks rose last week, while gasoline and distillate inventories fell more than expected.
Crude inventories climbed in line with trader expectations but the build-up was less than the 4.1-million-barrel increase reported by the American Petroleum Institute, an industry group, a day earlier.
Stockpiles at the Cushing, Oklahoma delivery hub for US futures fell by 785,000 barrels, giving a bullish tone to the report. "The crude stock story might gain further momentum as despite a year-on-year fall of just over 1,000 rigs in the Baker Hughes oil rig count, we would caution that the widely expected fall in US crude oil production could be significantly lower than many are expecting," JBC Energy consultancy said in a note.
REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Energy & Commodities
India's Vedanta misses Q4 profit estimates on lower prices
BHP targets Anglo American in bid valuing miner at US$39 billion
China's Sinopec charts global expansion with refinery in rival India's backyard
Gold trades in tight range as market focuses on US economic data
Oil settles lower as US business activity cools, concerns over Middle East ease
Orsted says Taiwan wind project to power TSMC on track for 2025 finish