Oil Edges Up As Markets Weigh Economic Outlook After Rate Hikes
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(Bloomberg) -- Oil rose as investors weighed the outlook for global growth amid a host of central bank rate hikes.
West Texas Intermediate traded near $84 a barrel after earlier finding support from a softer dollar. Traders are weighing the risks to the global growth outlook after Fed Chair Jerome Powell vowed that officials would crush inflation after they boosted rates by 75 basis points for a third straight time.
Thin liquidity has exacerbated price swings for oil, leading to wild volatility at times. Crude remains on track for its first quarterly decline in more than two years on concerns that demand may be crimped by an economic slowdown, but for most of September prices have been largely rangebound.
“There are so many inputs this week the market almost seems indecisive from where to take its cue,” said Harry Altham, an analyst at brokerage StoneX. “The market is currently waiting on signals from central banks to determine the demand landscape for the coming weeks and months.”
Data this week showed that signs of economic slowdown are mounting, as US gasoline and diesel demand fell to the lowest seasonal levels in more than a decade. The Energy Information Administration also reported nationwide US crude stockpiles and those at the key storage hub at Cushing, Oklahoma expanded last week.
“Demand was already being tempered by China’s intermittent lockdowns, while the macroeconomic outlook is deteriorating faster than expected in Europe and high prices are denting US demand,” Citigroup Inc. analysts said in a note dated Sept. 21. Recession concerns are weighing on sentiment, they added.
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