He Petroleum It rose for a third straight day on Wednesday as investors became more comfortable with risk a day after remarks from the Federal Reserve chairman eased concerns about future interest rate hikes.
The comments by Fed Chairman Jerome Powell, on Tuesday were seen as less harsh than feared, boosting risk appetite and weighing on the dollar. A weaker US currency makes oil cheaper for buyers holding other currencies.
“The reduction in risk appetite that had stemmed largely from Fed Chairman Powell’s comments yesterday applies equally to industrial commodities like oil by providing a significant headwind against further major advances in prices,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC.
He Brent crude U.S. West Texas Intermediate crude (WTI) rose $1.33, or 1.7%, to $78.47.
Investors hope that less aggressive interest rate hikes in the United States will help the world’s largest economy avoid a sharp economic slowdown or recession that would hurt demand for Petroleum.
On the other hand, it is expected that the end of the restrictions of the Covid-19 in China favor the demand for fuel.
“The impending rise in oil demand and weak global supply growth will ensure that the oil balance tightens in the coming months,” said Stephen Brennock of PVM brokerage.
Regarding the offer, the OPEC and its allies, known as OPEC+, decided last week to maintain production limits, and an Iranian official said Wednesday that the group is likely to maintain the current policy at their next meeting.
The earthquake that struck Turkey and Syria on Monday disrupted the flow of crude oil from Iraq and Azerbaijan to the Turkish port of Ceyhan. BP Azerbaijan has declared force majeure on shipments of Azerbaijani crude from the port, but the flow from Iraq resumed on Tuesday.
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