Oil prices surge on supply concerns, rate hike fears cap gains


New Delhi: Global crude oil prices jumped over 1% on Wednesday amid persistent supply concerns.

Analysts, however, said that anticipation of a rate hike by the Federal Open Market Committee of the US Federal Reserve capped gains.

Around 1215pm, the November Brent contract on the Intercontinental Exchange was at $91.63 per barrel, up 1.11% from its previous close, while West Texas Intermediate (WTI) futures rose 1% to $84.78 a barrel.

Along with the geopolitical tensions between Russia and the West, uncertainty over the Iran nuclear deal has added to supply concerns.

A top US official on Tuesday said that America does not expect a breakthrough in revival of the 2015 Iran nuclear deal at the upcoming UN General Assembly, adding that Washington was prepared for a mutual “compliance-for-compliance return”.

Iran is a major oil producer and if the deal is achieved and sanctions are lifted from the country, it would be able to contribute to the global oil market which has been struggling with supply shortages.

Ravindra Rao, head of commodity research at Kotak Securities, said, “NYMEX crude trades mixed near $84/bbl as market players remain non-committal ahead of Fed decision and inventory report. Fed is expected to maintain an aggressive stance however it has been factored and already pushed US dollar higher and commodities lower.”

He also said that the US inventory report is expected to be mixed as a modest rise is expected in US crude oil stocks but, along with a decline in gasoline stocks.

“Crude may remain directionless ahead of these events however we may see some gains if the Fed fails to surprise and if EIA report matches expectations,” Rao added.

Catch all the Commodity News and Updates on Live Mint.
Download The Mint News App to get Daily Market Updates & Live Business News.


Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Post your comment

Source link

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments