You are here: Home » Markets » Commodities » Other Commodities
Business Standard

Oil gives up gains as soaring US dollar offsets Putin's troop mobilisation

Brent futures were 10 cents, or 0.1%, lower at $90.52 a barrel by 10:13 a.m. EDT (1413 GMT), while U.S. West Texas Intermediate (WTI) crude fell 28 cents, or 0.3%, to $83.66.

Topics
Crude Oil Prices | US Dollar | Brent crude

Reuters  |  NEW YORK 

Photo: Bloomberg
Photo: Bloomberg

By Scott DiSavino

NEW YORK (Reuters) -Oil prices gave up early gains on Wednesday as a soaring dollar and global recession fears offset worries about a Russian military mobilization.

A big increase in U.S. crude stocks could also weaken oil prices. Analysts forecast U.S. crude stocks rose 2.2 million barrels last week. [EIA/S]

On Tuesday, data from the American Petroleum Institute (API) industry group showed crude stocks rose 1.0 million barrels in the week to Sept. 16. [API/S]

Brent futures were 10 cents, or 0.1%, lower at $90.52 a barrel by 10:13 a.m. EDT (1413 GMT), while U.S. West Texas Intermediate (WTI) crude fell 28 cents, or 0.3%, to $83.66.

Both contracts were up more than $2 earlier in the session.

Putin said he had signed a decree on partial mobilisation, saying he was defending Russian territories and that the West wanted to destroy the country.

"The oil complex (advanced) largely off Putin's apparent escalation of the Ukraine war," analysts at energy consulting firm Ritterbusch and Associates said, noting the strong dollar and expected higher U.S. interest rates will limit oil price gains.

Oil prices soared to a multi-year high in March after the Ukraine war broke out. European Union sanctions banning seaborne imports of Russian crude will come into force on Dec. 5.

Investors this week have been bracing for another aggressive interest rate hike from the U.S. Federal Reserve that they fear could lead to recession and plunging fuel demand.

The Fed is widely expected to hike rates by 75 basis points for the third time in a row later on Wednesday in its drive to rein in inflation.

The dollar was on track for its highest close against a basket of other currencies in over 20 years. A strong dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies.

Signs of a recovery in Chinese demand, hit by COVID-19 shutdowns, had also helped lift prices earlier in the session.

At least three Chinese state oil refineries and a privately run mega refiner are considering increasing runs by up to 10% in October from September, eyeing stronger demand and a possible surge in fourth-quarter fuel exports, people with knowledge of the matter said.

Meanwhile, the United States said that it did not expect a breakthrough on reviving the 2015 Iran nuclear deal at this week's U.N. General Assembly, reducing the prospects of a return of Iranian barrels to the international market.

The OPEC+ producer grouping - the Organization of the Petroleum Exporting Countries and associates including Russia - is now falling a record 3.58 million barrels per day short of its production targets, or about 3.5% of global demand. The shortfall highlights the underlying tightness of supply in the market.

(Additional reporting by Ahmad Ghaddar in London, Yuka Obayashi in Tokyo, Isabel Kua and Florence Tan in Singapore; editing by Jason Neely, Kirsten Donovan)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, September 21 2022. 21:07 IST
RECOMMENDED FOR YOU
.