Oil Swings Near $77 As Part Of Key Pipe Starts And Dollar Climbs
Track the latest oil prices here.
(Bloomberg) -- Oil fluctuated near $77 a barrel as a section of the major Keystone pipeline restarted and the dollar jumped.
West Texas Intermediate futures edged lower, trading in a narrow daily range along with global benchmark Brent crude, after three consecutive gains. A section of the pipeline that extends from Hardisty, Alberta, to Wood River and Patoka, Illinois, was restarted and TC Energy Corp. is continuing repairs and remediation on the affected segment.
Oil futures were also under some pressure from a rising dollar after the Federal Reserve rebuffed expectations for a dovish tilt and said interest rates will go higher for longer. A stronger greenback makes commodities priced in the currency less attractive.
“We are recovering back to more normal levels after last week’s sell off,” said Jens Pedersen, a senior analyst at Danske Bank.
Oil is still on track for a slight annual gain following a volatile 12 months that’s been plagued by a persistent lack of liquidity. However, investors are juggling a mixed outlook for commodity demand, including the near-term impact of China’s end to Covid Zero, which has sparked a surge in infections.
The International Energy Agency said Wednesday that oil prices could rally next year as sanctions squeeze Russian supply, although OPEC remains cautious about demand in early 2023. The US Federal Reserve also raised interest rates again and warned they still have room to climb.
As cold weather hit large parts of Europe, diesel prices have also recovered from their recent slump. The ICE gasoil crack — a measure of the profitability of diesel over crude — climbed above $40 a barrel this week.
Elements, Bloomberg’s daily energy and commodities newsletter, is now available. Sign up here.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.