Oil falls on fears inflation may dent fuel demand growth
Oil prices dropped on Wednesday, after a mixed finish in the previous session, amid worries that soaring coal and natural gas prices in China, India and Europe will stoke inflation and slow global growth, reducing oil demand.
Oil prices dropped on Wednesday, after a mixed finish in the previous session, amid worries that soaring coal and natural gas prices in China, India and Europe will stoke inflation and slow global growth, reducing oil demand.
A strong U.S. dollar, trading near a one-year high, also weighed on oil prices, as it makes oil more expensive for those holding other currencies.
See Zee Business Live TV Streaming Below:
U.S. West Texas Intermediate (WTI) crude futures fell 71 cents, or 0.9%, to $79.93 a barrel at 0247 GMT after gaining 12 cents on Tuesday.
Brent crude futures fell 70 cents, or 0.8%, to $82.72 a barrel, extending a 23 cent loss on Tuesday.
The International Monetary Fund on Tuesday cut its growth outlooks for the United States and other major economies on worries supply chain disruptions and cost pressures are holding back the global economic recovery from the coronavirus pandemic.
Commonwealth Bank analysts highlighted the IMF`s concern that "momentum has weakened and uncertainty has increased".
However, oil watchers are still focused on whether soaring gas and coal prices will lead to more demand for oil products for power generation.
"There are growing expectations that the high prices for gas and thermal coal are likely to boost demand for alternative fuels such as diesel and fuel oil," ANZ Research analysts said in a note.
The market is also awaiting U.S. oil inventory data, delayed by a day following the Columbus Day holiday on Monday.
Analysts polled by Reuters estimate U.S. crude inventories rose by 100,000 barrels in the week to Oct. 8, which would mark a third straight week of increases.
They also estimated that gasoline stockpiles rose about 100,000 barrels, while distillate inventories, which include diesel, heating oil and jet fuel, dropped by about 1 million barrels.
Data from the American Petroleum Institute, an industry group, is due at 4:30 p.m. EDT (2030 GMT) on Wednesday and from the U.S. Energy Information Administration on Thursday.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding: How many years will it take to reach Rs 3 crore corpus if your monthly SIP is Rs 4,000, Rs 5,000, or Rs 6,000
IRCTC Dividend 2024: Railway PSU announces 200% interim dividend - Check record date and other details
Power of Compounding: Salary Rs 25,000 per month; is it possible to create over Rs 2.60 crore corpus; understand it through calculations
Reduce Home Loan EMI vs Reduce Tenure: Rs 75 lakh, 25-year loan; which option can save Rs 25 lakh and 64 months and how? Know here
New Year Pick by Anil Singhvi: This smallcap stock can offer up to 75% return in long term - Check targets
PSU Oil Stocks: Here's what brokerage suggests on these 2 largecap, 1 midcap scrips - Buy, Sell or Hold?
Power of Compounding: How many years it will take to reach Rs 2 crore corpus if your monthly SIP is Rs 3,000, Rs 4,000, or Rs 5,000
11:45 AM IST