Crude oil futures prices finally closed higher on Friday (10th), but crude oil fell nearly 4% this week due to Federal Reserve (Fed) Chairman Jerome Powell’s hawkish interest rate comments.
Analysts said that the U.S. added 311,000 non-farm jobs in February, much higher than expected, raising expectations that the Fed may strengthen interest rate hikes, but a strong economy also indicates good energy demand, so it may also be seen as a support for oil prices .
energy commodity prices
- West Texas Intermediate (WTI) futures for April delivery rose 96 cents, or 1.3%, to settle at $76.68 a barrel, the front-month WTI Crude OilFutures prices fell 3.8% for the week.
- Brent futures for May delivery rose $1.19, or 1.5%, to settle at $82.78 a barrel. Brent Crude OilFutures prices fell nearly 3.6% this week.
- Gasoline futures for April delivery rose 1.6% to settle at $2.6458 a gallon, after falling 3.8% for the week.
- delivered in AprilHot Fuel FuturesPrices rose 3.9 percent to $2.7729 a gallon, down 4.8 percent for the week.
- Natural gas futures for April delivery fell 4.4% to settle at $2.43 per million Btu, down 19% for the week. .
market drivers
Manish Raj, manager of energy consultancy Velandera Energy Partners, said the crude oil market was caught between unfavorable inflation and a recovering job market. The strong jobs report and the bleak outlook caused by Powell made the market more certain that the Fed had no choice but to Further rate hikes.
WTI and Brent Crude OilFutures prices posted their biggest weekly losses this week since the week ended Feb. 17.
Ricardo Evangelista, senior analyst at ActivTrades, said Powell’s stance is very hawkish, and the market is pricing in a larger rate hike, and a higher final interest rate, which could reach 6%, so the probability of a recession increases and oil demand The odds also fall, causing prices to fall. “Traders are starting to price in an economic contraction as tighter U.S. monetary policy threatens to lead to it.”
In testimony before the Senate on Tuesday, Powell warned that interest rates would need to rise higher than previously expected to keep inflation under control, and that an even higher rate hike could come in March.
In testimony before the House of Representatives on Wednesday, Powell said no decision had been made on how much to raise interest rates in March, stressing the importance of upcoming data.
The U.S. Labor Department reported on Friday that non-farm payrolls increased by 311,000 in February, higher than the 225,000 expected by economists surveyed by The Wall Street Journal, compared with a revised 504,000 in January.
StoneX Kansas City energy team said on Friday that the market struggled through Powell’s comments until Thursday, and the final strong jobs report showed that the economy still has vitality and can now support a higher federal funds rate.
Matt Parry, director of long-term research at Energy Aspects, believes oil prices will remain volatile in the coming weeks as oil trades without a clear direction, but fundamentals should tighten in the second half of the year as China’s economic reopening accelerates and simplifies, supporting energy Demand rises.
In other news, output from the Organization of the Petroleum Exporting Countries and its allies (OPEC+) fell by 80,000 bpd in February, even as Russian production edged up by 10,000 bpd, according to a Platts survey by S&P Global Commodity Insights released on Friday. day.