Brent posts nearly 10% in weekly decline as supply frets evade

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Brent posts nearly 10% in weekly decline as supply frets evade

On Friday, both US and UK crude oil futures’ prices fell over 2 per cent, while both benchmarks had extended their latest leg of weekly decline amid a market landscape that illustrates a sapping supply constrains might have been easing.

Aside from that, US Fed’s Bullard said earlier in the day that the US Federal Reserve would need to continue to stay on a hawkish rate-hike cycle as the rate-hikes had had limited impacts on inflation indicators thus far.

Following the US Fed’s signal of a sustenance in rate-hike cycle, investors begin to bet on a 75 bps (basis percentage point) rate-hike at the Fed’s December policy meet, which eventually would proffer a boost to US Dollar.

The landscape had dampened sentiments of commodity traders significantly as crude oil prices usually decline during an upsurge in US Dollar. Apart from that, investors remained cautious over China’s crude oil demand following a mass-scale ease in pandemic restrictions alongside the US Fed’s December policy meet.

Crude oil falls over 10 per cent in the week

Citing statistics, on Friday’s commodity market wind-down, UK crude oil futures’ prices fell 2.4 per cent to $87.62 a barrel, while US WTI crude oil futures’ prices shrugged off 1.9 per cent to $80.08 a barrel.

Over the week, both benchmarks had reported their second straight weekly decline, as UK crude dipped 9 per cent and US crude oil futures’ prices pummelled 10 per cent. Meanwhile, a partner at Again Capital LLC in New York, John Kilduff said, “The situation in China with COVID continues to haunt this market.

So much optimism gets priced in to the market as soon as they try to say that they're going to reopen, but then the reality on the ground is just completely opposite of that hopeful analysis”.