New York oil prices rose for the first time in five trading days. It is believed that low-priced purchases have been introduced amid the perception that the fall in the previous four trading days was excessive.
On the New York Mercantile Exchange on the 22nd (local time), West Texas Intermediate (WTI) for October delivery, up $1.08 (1.50%) from the previous trading day, closed at $73.01 per barrel.
Brent crude, the global benchmark, closed at $77.22 a barrel for October delivery, up $1.17 or 1.54% from the previous session.
Oil prices in New York have rebounded for the first time in a while. Oil prices have fallen sharply recently on news that Israel and Hamas, the Palestinian militant group, have made progress in negotiations for a ceasefire in the Gaza war, and that U.S. employment indicators have been partially inflated.
The WTI price plunged from 78.16 U.S. dollars on Wednesday to 71.93 dollars from the previous day’s close. It plunged more than 6 dollars in the four trading days, and 71.93 dollars is the lowest since early February this year. The rise is interpreted as being driven by low-priced purchases.
Expectations were also positive for oil prices that Federal Reserve Chairman Jerome Powell’s speech scheduled for Sunday would mention the possibility of a rate cut in September. Powell will speak at the Jackson Hole symposium in Wyoming.
“Expectations that the Fed will ease monetary policy supported investor sentiment in the energy market,” ANZ Research said.
Lower benchmark interest rates also lower borrowing costs, increasing economic activity and boosting demand for crude oil. The U.S. service and manufacturing industries were mixed.
According to S&P Global, the U.S. service sector purchasing manager index (PMI) in August was 55.2. Compared to the July figure 55, the business has expanded further. In contrast, the manufacturing sector’s PMI preliminary reading in August hit 48.0, continuing its contraction. The July figure was 49.6 below.
The lack of progress in negotiations for a ceasefire in Gaza has also put upward pressure on oil prices. U.S. Secretary of State Anthony Blinken visited the Middle East this week to broker a truce in Gaza, but returned home empty-handed without producing any results. Investors are watching that the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, may reconsider plans to gradually ease some production cuts in October. The Organization of Major Oil-Producing Countries (OPEC+), including Russia, said it could suspend or reverse plans to increase production as needed.
JENNIFER KIM
US ASIA JOURNAL
