Oil Prices Rebound After Three Days of Losses

Oil prices rose, recovering some of the losses from the past three days, despite some Federal Reserve officials indicating their willingness to raise interest rates if inflation risks materialize—a measure that could hurt oil demand.

On Thursday, oil prices climbed, recouping part of the losses from the previous three days. This occurred despite statements from some U.S. Federal Reserve officials about their readiness to increase interest rates should inflation risks persist, a move that could negatively impact oil demand.

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Brent crude futures rose 51 cents, or 0.6%, to $82.41 per barrel at 11:21 GMT. U.S. West Texas Intermediate (WTI) crude futures also gained 51 cents, or 0.7%, to $78.08.

USOIL

Both benchmarks fell more than 1% on Wednesday, marking their third consecutive day of losses.

Minutes released on Wednesday from the Federal Reserve’s latest policy meeting revealed that the central bank discussed the possibility of raising interest rates due to persistent inflation.

Higher interest rates increase borrowing costs, which reduces the funds available for economic growth and oil demand in the world’s largest consumer.

Additionally, U.S. crude inventories rose by 1.8 million barrels last week, according to the Energy Information Administration, compared to an estimated reduction of 2.5 million barrels.

Globally, physical crude markets have been pressured by weak refinery demand and ample supply.

Russia stated it exceeded its OPEC+ production quota in April for “technical reasons” and will soon present a plan to the OPEC Secretariat to compensate for the overproduction, according to the Russian Energy Ministry late Wednesday.

OPEC+, which includes OPEC and allies led by Russia, will meet on June 1 to decide on production cut levels.

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ABOUT THE AUTHOR See More
Ignacio Teson
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
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