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Market News International oil prices rose, U.S. inventories unexpectedly fell, but the market must be wary of two major negatives
International oil prices rose, U.S. inventories unexpectedly fell, but the market must be wary of two major negatives
On Wednesday (May 18), international oil prices rose more than 1%, as industry data showed that U.S. crude oil inventories fell and the easing of anti-epidemic containment measures may stimulate demand. But the oil market is also facing two major negatives. The Federal Reserve's aggressive interest rate hike is good for the dollar to suppress commodity prices, and the United States temporarily cancels the ban on negotiations between Chevron and Venezuela, which is expected to allow more crude oil to flow into the market.
2022-05-18
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On Wednesday (May 18), international oil prices rose more than 1%, as industry data showed that U.S. crude oil inventories fell and the easing of anti-epidemic containment measures may stimulate demand. However, the oil market is also facing two major bears. The Federal Reserve's aggressive interest rate hike is good for the dollar to suppress commodity prices. The United States temporarily cancels the ban on negotiations between Chevron and Venezuela, which is expected to allow more crude oil to flow into the market.
At 16:37 GMT+8, NYMEX crude oil futures rose 1.92% to $114.56 a barrel; ICE Brent crude oil futures rose 1.54% to $113.65 a barrel.
Data released overnight by the American Petroleum Institute (API) showed that crude oil inventories unexpectedly fell by 2.445 million barrels in the week ended May 13, compared with an expected increase of 1.533 million barrels; gasoline inventories also fell far more than expected by 5.102 million barrels, which sparked supply concerns . Official U.S. Energy Information Administration (EIA) weekly inventory data will be released at 22:30 GMT+8.
"Surge in finished product prices and tight crude inventories are supporting WTI crude, and I believe this will limit downside for oil prices in the coming sessions," said Jeffrey Halley, senior analyst at OANDA.
But crude oil prices could still face some pressure. On the macro front, Federal Reserve Chairman Powell said on Tuesday (May 17) that the central bank will raise interest rates to the level needed to curb inflation. The Fed's interest rate hike is good for the US dollar, which is negative for US dollar-denominated commodities.
Powell pointed out that as long as inflation does not bow, the Fed will not back down from raising interest rates. "If this involves moving beyond the widely understood level of 'neutral' interest rates, we will not hesitate to do so. We will move forward until we feel we can think 'financial conditions are in place and we are seeing inflation falling.' "
There were also reports that the United States allowed Chevron Corp (CVX.N) to start license talks with Venezuela. ANZ research analysts said the temporary lifting of the U.S. ban on such talks could lead to more crude entering the market.
But Washington has not made a final decision on extending the limited license Chevron currently operates in Venezuela, the sources said. Chevron is the last U.S. oil producer to maintain operations in Venezuela. Venezuela has the largest crude oil reserves in the world.
At 16:37 GMT+8, NYMEX crude oil futures rose 1.92% to $114.56 a barrel; ICE Brent crude oil futures rose 1.54% to $113.65 a barrel.
Data released overnight by the American Petroleum Institute (API) showed that crude oil inventories unexpectedly fell by 2.445 million barrels in the week ended May 13, compared with an expected increase of 1.533 million barrels; gasoline inventories also fell far more than expected by 5.102 million barrels, which sparked supply concerns . Official U.S. Energy Information Administration (EIA) weekly inventory data will be released at 22:30 GMT+8.
"Surge in finished product prices and tight crude inventories are supporting WTI crude, and I believe this will limit downside for oil prices in the coming sessions," said Jeffrey Halley, senior analyst at OANDA.
But crude oil prices could still face some pressure. On the macro front, Federal Reserve Chairman Powell said on Tuesday (May 17) that the central bank will raise interest rates to the level needed to curb inflation. The Fed's interest rate hike is good for the US dollar, which is negative for US dollar-denominated commodities.
Powell pointed out that as long as inflation does not bow, the Fed will not back down from raising interest rates. "If this involves moving beyond the widely understood level of 'neutral' interest rates, we will not hesitate to do so. We will move forward until we feel we can think 'financial conditions are in place and we are seeing inflation falling.' "
There were also reports that the United States allowed Chevron Corp (CVX.N) to start license talks with Venezuela. ANZ research analysts said the temporary lifting of the U.S. ban on such talks could lead to more crude entering the market.
But Washington has not made a final decision on extending the limited license Chevron currently operates in Venezuela, the sources said. Chevron is the last U.S. oil producer to maintain operations in Venezuela. Venezuela has the largest crude oil reserves in the world.
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