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Thursday, February 29, 2024

Oil Rises on Hawkish Fed and as U.S. Demand Withstands Omicron

Oil Rises on Hawkish Fed and as U.S. Demand Withstands Omicron
© Reuters. Oil Rises on Hawkish Fed and as U.S. Demand Withstands Omicron

(Bloomberg) — Oil rose after U.S. crude stockpiles fell the most since September and a more hawkish Federal Reserve spurred a broader rally in financial markets on speculation it can slow inflation without derailing growth.

Futures in New York climbed as much as 1.2% in early Asian trading after recovering from omicron concern in the previous session to close slightly higher. The S&P 500 closed near an all-time high Wednesday after Fed officials intensified their battle against the hottest inflation in a generation by moving to end their asset-buying program earlier than anticipated.

See also: Fed Doubles Taper, Signals Three 2022 Hikes in Inflation Pivot

U.S. crude stockpiles shrunk by 4.58 million barrels last week, the Energy Information Administration reported, in a positive sign for demand in the world’s largest economy. American gasoline demand is surging, suggesting concerns about the new virus variant aren’t keeping drivers off the roads. 

 

Conflicting signals on demand and supply have seen oil swing between gains and losses this week. While the outlook for consumption appears to be deteriorating as China, the biggest oil importer, limits holiday travel to try and contain omicron, the picture appears more positive in the U.S. The International Energy Agency said this week that the market was already in surplus, but Vitol Group, the world’s largest independent oil trader, said it expects prices to rise next year due to a lack of new investment in production. 

 

 

©2021 Bloomberg L.P.

Source: Investing.com

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