Fear of rate hikes and swelling stocks cause oil to stabilize after falling

28 Feb 2023 , 08:36 AM

Early Asian trading on Tuesday saw oil prices stabilize after sliding on good U.S. manufacturing data that stoked concerns that more interest rate hikes would stifle demand. Analysts also projected that American crude inventories would increase once more.

The April Brent crude futures contract, which is set to expire on Tuesday, had fallen 20 cents to $82.25 per barrel, extending a 0.9% loss from the previous session. The more active May contract increased by 4 cents to $82.08 per barrel.

West Texas Intermediate (WTI) crude for sale in the United States rose 11 cents to $75.79 a barrel.

Oil prices were kept in check by the possibility of additional rate increases following stronger-than-anticipated new orders for essential US-made capital goods in January, while US Fed Governor Philip Jefferson noted that US inflation for services remained ‘stubbornly high.’

Yet crude didn’t fall because of the notion that slower wage growth may help contain inflation.

The American Petroleum Institute business organization is expected to provide the most recent data on U.S. oil stocks on Tuesday, and the government’s Energy Information Administration is expected to release data on demand indications on Wednesday.

Distillate inventories, which comprise diesel and heating oil, were anticipated to have declined by approximately 500,000 barrels last week, which helped to put a floor under prices.

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