Oil prices steady due to concern over rising interest rates

Oil prices stayed the same as apprehensions regarding increasing interest rates and the probability of decreasing supply somewhat compensated for the international market and the anticipation of fuel usage.

Brent crude oil prices fell 34 cents, or 0.43%, to $81.32 a barrel. U.S. West Texas Intermediate crude oil fell 28 cents, or 0.36%, to $77.59.

Last week, both contracts dropped by over 5%, marking the first of five drops, as American gasoline consumption decreased versus last year.

Weaker U.S. economic data and worse-than-expected corporate earnings from the technology sector caused investors to worry. A stabilizing U.S. dollar and rising bond yields also pressure commodity markets.

Central banks from the United States to the United Kingdom and Europe are expected to raise interest rates at their May meeting to tackle expected high inflation.

China’s struggling economic recovery from the COVID-19 pandemic also weighs on the outlook for oil demand. China’s customs data released on Friday depicted record-high numbers of crude imports in March. Notably, China’s imports from Saudi Arabia and Russia, its two leading suppliers, exceed 2 million barrels a day.

Refining margins in Asia weakened due to higher output from top refiners China and India.

Analysts and traders are pricing a recovery in Chinese fuel demand for the second half of 2023 and a potential supply squeeze due to further supply cuts planned by the OPEC+ producer group from May.

EU countries are building wind farms

Seven nations — France, Germany, the Netherlands, Norway, and the United Kingdom (all of which, except the latter, belong to the European Union) — have pledged to rapidly construct wind farms, establish marine energy plants or similar renewable power generation areas, and focus on carbon sequestration and renewable hydrogen initiatives.

The purpose of this is to limit dependence on Russian gas. Last year, Norway became Europe’s biggest gas supplier after Russia cut supplies to Europe following the war in Ukraine.