Oil prices rises to about $2 on Monday, bolstered by supply fears, a dip in the U.S. dollar, and early strength in equity markets, but prices seesawed as some worried fuel demand could weaken if the Federal Reserve raises U.S. interest rates too aggressively.
Brent crude futures for September settled up $1.95, or 1.9%, at $105.15 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose $2, or 2.1%, to settle at $96.70 a barrel.
“A slightly weaker U.S. dollar and improving equity markets are supporting oil,” UBS oil analyst Giovanni Staunovo said. (.STOXX)After early strength, U.S. stocks moved lower in afternoon trading, with investors cautious about the Fed meeting this week and earnings from several growth companies.
Oil futures have been volatile in recent weeks, pressured by worries that rising interest rates could slow economic activity and fuel demand but supported by tight supply, especially since Russia’s invasion of Ukraine and Western sanctions on Moscow.
“The U.S. and European economies are slowing and with the Federal Reserve set to raise interest rates again this week, traders remain very cautious,” said Dennis Kissler, senior vice president of trading at BOK Financial.
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Source: Reuters
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