Crude rebounds from 3-week low on Iran’s threats
2023-11-02
Summary:
Oil markets are tense due to the Middle East conflict. The Fed maintains rates, and economic data hints at a slowdown.
Oil prices edged higher in early trade on Thursday as the conflict in the Middle East kept investors on edge. A three-week low was hit the previous session after the Fed’s meeting.
The central bank held interest rates steady as expected but left the door open to a further increase due to strong economy. Powell added that the FOMC is not considering rate cuts at this time.
The Atlanta Fed’s GDPNow growth tracker slashed expectations for fourth-quarter GDP almost in half to 1.2% from 2.3%. Most forecasters expect economic growth to tail off ahead.
US crude stockpiles possibly rose as much as 1.3 million barrels during the week ended 27 Oct, according to the API. Refiners undergoing maintenance restarted earlier than expected.
Iran’s rulers have warned Israel of an escalation if does not end aggression against Palestinians, indicating that Tehran-backed proxies in the region are ready to act.
But Teheran does not want regional war, which carries risks for the nation and its religious rulers, according to three Iranians connected to the government.
Crude are pressured by a strong dollar, US crude build as well as decreasing supply fears. Brent oil consolidates around the 85 level with a moderately bearish bias ahead of Friday’s NFP report.
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