Oil trades stable; rate debate offsets hopes for Chinese demand

Oil steadied on Friday as investors weighed the impact of sharp interest rate hikes on energy consumption, offsetting hopes of higher Chinese demand and production cuts from the OPEC and his allies.

To fight inflation, the Federal Reserve The US is trying to slow down the economy and will continue to raise its short-term rate target, the Philadelphia-based bank’s president, Patrick Harker, said on Thursday.

At 10:52 GMT, crude Brent fell 17 cents, or 0.18%, to $92.56 a barrel, while the West Texas Intermediate In the United States (WTI) it was up 10 cents, or 0.12%, at $84.60.

“With several key Fed members taking turns in the hawkish pulpit this week arguing for even higher interest rates, optimism is fading over hopes of an easing of the China lockdown,” he said in a note. Stephen Innes of SPI Asset Management. “Everyone is pining for a commodity surge fueled by the reopening of China, but we’re not there yet.”

Brent, which neared its all-time high of $147 in March, is headed for a weekly gain of less than 1%, while US crude could drop more than 1.5%. Both references fell in the previous week.

Crude rose on Thursday after Bloomberg reported that Beijing is considering reducing the quarantine period for visitors to seven days from the current 10. There has been no official confirmation from Beijing.

China, the world’s largest importer of crude oil, has this year applied strict restrictions against covid-19which has weighed on business and economic activity and has reduced the demand for fuel.

The barrel has been helped by the European Union’s looming ban on Russian oil, as well as the production cut agreed earlier this month by the Organization of the Petroleum Exporting Countries and its allies, including Russia, a group known as like OPEC+.