Oil prices continued to rise following news of another large decline in the volume of US crude inventories. The American Petroleum Institute reported a decline of 6.53 million barrels in crude stockpiles last week.
Following this news, West Texas Intermediate futures rose by approximately 2% to $89 per barrel. Aside from the shrinkage in demand, this price increase is also largely attributed to the weakening of the dollar, which has made commodities priced in the currency more attractive to buyers.
Investors are now shifting their focus to the impending interest rate announcement from the Federal Reserve on Wednesday, during which the central bank is expected to raise interest rates by 75 basis points in what will be the four consecutive rise.
Charu Chanana, a market strategist for Saxo Capital Markets Pte in Singapore, observed that another cause for the rebound of crude experienced this month is the decision by OPEC+ to cut production. Chanana also acknowledged, however, that “overall sentiment is muddled by weakening global demand concerns and the EU sanctions on Russian crude.” Last month, OPEC’s members agreed to make a production cut of 100,000 barrels per day.
