![]() ![]() “It is this increased probability of pulling forward the end of the business cycle and the next recession that is worrying oil markets given this would entail falling oil demand.” The Fed’s decision to accelerate rate hikes is “both an admission that the Fed was far too optimistic on the outlook for inflation and increasingly calls into question the Fed’s outlook for economic growth,” said DTN’s Vincent. Read: As Fed aggressively raises rates, here are 4 takeaways from Jerome Powell’s press conference “The dominant trend in the market remains bullish though as the geopolitical fear bid resulting from the war in Ukraine is more than offsetting the handful of fundamental headwinds (including the new Iran sanctions) facing energy right now,” he said. The energy market has been volatile in recent sessions as the Fed’s “outsized rate hike, growing concerns about global economy and subsequent demand estimates, and an uptick in domestic production have combined to trigger a wave of profit-taking after oil’s latest leg higher,” said Richey. Crude ended at a two-week low Wednesday after the Federal Reserve delivered a 75 basis point interest rate hike, but equities initially bounced after the decision. and global benchmark prices began Thursday on a negative note as equities and other assets perceived as risky moved lower. Meanwhile, Troy Vincent, senior market analyst at DTN, said oil trading Thursday got a boost as a visit to Ukraine by the European leaders was “interpreted as bullish for oil given that it may well signal another coming round of sanctions against Russia and continued pressure on Russia’s oil trade.” Treasury Department on Thursday said it sanctioned a network of Iranian petrochemical producers as well as “front companies” in China and the United Arab Emirates which support companies it says broker the sale of Iranian petrochemicals abroad. ![]() slapped “fresh economic sanctions on Iran in an effort to force the oil-producing nation back into a nuclear agreement,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Oil prices bottomed out and reversed direction Thursday following news that the U.S. Rose 1.6% to $3.9554 a gallon, while July heating oilĬlimbed 0.6% to $7.464 per million British thermal units. Based on the front-month contracts, Brent and WTI both settled Wednesday around their lowest in two weeks. The global benchmark, added $1.30, or 1.1%, to $119.81 a barrel on ICE Futures Europe. Rose $2.27, or 2%, to settle at $117.58 a barrel on the New York Mercantile Exchange, staging a partial rebound from Wednesday’s 3% decline. West Texas Intermediate crude for July delivery
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