Chat with us, powered by LiveChat

Choose country & language:

Close Icon

Oil prices slip on rate hikes bets

Home >  Daily Market Digest >  Oil prices slip on rate hikes bets

detail_image_market
author_img

Written by:
Myrsini Giannouli

21 July 2022
Share the article

Oil prices slipped on Wednesday, remaining above $100 per barrel though, with WTI retreating to the $102.5 per barrel level. If WTI declines again, it may encounter support near $98 per barrel and further down at $90 per barrel, while resistance can be found near the $105 per barrel level and higher up at $112 per barrel. 

Heightened global recession fears have recently reduced the oil demand outlook though, putting pressure on oil prices. Concerns that interest rate hikes could slow global economic growth reducing energy demand have pushed oil prices down. Stalling economic growth combined with fiscal tightening and soaring inflation gives rise to fears of recession, halting the ascend of oil prices. 

The Fed is expected to raise its interest rates again considerably this month to tackle skyrocketing US inflation, and a 75 bps Fed rate hike is priced in by markets. An increasing number of major Central Banks are moving towards a tighter fiscal policy. The ECB expected to raise its interest rate by at least 25 bps on Thursday, which may push gold prices further down. The BOE is also moving in a more hawkish direction, reportedly considering a rate hike of up to 50 bps. 

US Crude Oil Inventories released on Wednesday were unexpectedly low, decreasing by 0.4 million barrels from last week. Oil supplies remain tight, supporting oil prices. In its latest meeting, OPEC+ maintained its output policy, raising its output by approximately 648,000 barrels a day. Many OPEC members continue to underperform though, raising doubts on whether the organization can maintain its output goal. 

The US administration has been trying to secure a deal with Saudi Arabia to increase oil output and bring down oil prices. US President Joe Biden visited the country in an attempt to achieve assurances of higher oil output, but on Monday, reports that his attempts were fruitless, drove oil prices down.

Energy pressures in Europe are also providing support to oil prices. Nord Stream 1, Germany’s biggest gas pipeline, has been shut off for maintenance until the 21st of July, raising fears that Russia might use this pretext to cut off completely gas supplies from this pipeline. Moreover, Gazprom announced on Monday that it could not guarantee gas supplies to certain countries, due to ‘extraordinary’ circumstances, further exasperating the EU’s energy crisis.

Uncertainty over China’s oil demand is causing fluctuations in oil prices. China is the largest importer of crude oil and Covid lockdowns have dampened oil demand, pushing prices down. Reports of massive Covid testing in China and renewed restrictions have reignited fears of extensive lockdowns, pushing oil prices down.

WTI 1hr chart

TRADE WTI

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

author_img

Written by:
Myrsini Giannouli

Share the article:

Latest news

main_image_market

US economic growth boosts Dollar

Myrsini Giannouli 29 March 2024
main_image_market

Gold prices rise to a fresh all-time high

Myrsini Giannouli 29 March 2024

Oil prices gain strength on supply concerns

Myrsini Giannouli 29 March 2024

Bitcoin breaks through $70,000 barrier

Myrsini Giannouli 29 March 2024
Why TopFX
10-years
13+ years

industry presence
as a Liquidity Provider

Spreads
Spreads
from 0.0 pips

and reliable execution

Segregated
Segregated

client funds

First-class
First-class

customer support

Open your Live Account in 3 Steps
Step 1

Fill in the registration
form and click
"Create account".

Step 2

Once you are in the client secure area, please proceed with uploading your Proof of Identity and Proof of Residence.

Step 3

When your live account is approved, you can deposit funds and start trading on your chosen platform!

IMPORTANT

The website you are now viewing is operated by TopFX Global Ltd, an entity which is regulated by the Financial Services Authority (FSA) of Seychelles with a Securities Dealer License No SD037 that is not established in the European Union or regulated by an EU National Competent Authority.

If you wish to proceed please confirm that you understand and accept the risks associated with trading with a non-EU entity (as these risks are described in the Own Initiative Acknowledgment Form and that your decision will be at your own exclusive initiative and that no solicitation has been made by TopFX Global Ltd or any other entity within the Group.

Don't show this message again

Cookies on TopFX

The TopFX website uses cookies to optimise user experience.

These cookies fall under the following categories: essential, functional and marketing cookies. Marketing cookies may also include third-party cookies.

Manage Preferences

You can customize your selection of which cookies you want to accept.

  • Essential

    These cookies are necessary for the website to function correctly and cannot be switched off.

  • Functional

    Functional cookies allow the website to remember users' preferences and the choices you make on the website such as username, region, and language.

  • Marketing

    These cookies are used to track visitors across our websites and show you more relevant ads. Marketing cookies also include third-party cookies from partners. For more information relating to data protection & collection please view our Privacy Policy and Cookie Disclosure.