Due to a reduction in China's reserve ratio, oil prices have increased to a ten months high

15 Sep 2023 , 10:19 AM

On Friday, oil prices reached their highest point in ten months as a result of China reducing the amount of cash reserves required by banks to support its economic recovery and on anticipations that the major cycles of global interest rate hikes were coming to an end.

Brent crude increased 46 cents, or 0.5%, to $94.16 while West Texas Intermediate crude (WTI) in the United States increased by 0.6% to $90.74. The prices of both benchmarks were at their highest points since November.

Oil prices are expected to end the week higher for a third straight week due to ongoing supply concerns and predictions that the U.S. central bank will maintain rates after Europe suggested that its rate hike on Thursday would be its final one.

Higher interest rates make borrowing more expensive for households and businesses, which might impede economic growth and lower demand for oil.

The International Energy Agency stated this week that it anticipates a market deficit through the fourth quarter as a result of Saudi Arabia and Russia’s prolonged oil supply restrictions. A negative report on US inventories caused a momentary drop in prices, but supply concerns soon forced prices back up.

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