Oil’s three-day rally ended as policymakers made clear they would continue tightening economic reins in the fight against inflation, reigniting fears of a global slowdown.
West Texas Intermediate fell 1.5% to settle near $76 a barrel on Thursday. European Central Bank leaders joined their US counterparts in warning more rates hikes are to come. The promise to keep interest rates higher for longer sent the dollar surging and pummeled equity markets.
Compounding bearishness, a section of Keystone pipeline was restarted, resuming the flow of Canadian crude to US Midwest refineries. Even as the pipeline outage disrupts crude deliveries to Cushing, Oklahoma, and beyond, stockpiles on the Gulf Coast surged last week, suggesting the market remains well supplied for now. TC Energy Corp. is continuing repairs and remediation on the segment affected by last week’s oil spill.
Oil is on track for a slight annual gain following a volatile 12 months that’s been plagued by a persistent lack of liquidity. Volatility surged to the highest on record as prices skyrocketed in the wake of Russia’s invasion of Ukraine and then fell sharply as fears of a global recession and China’s struggles to contain Covid has clouded the outlook for demand. Both benchmarks have shed their war-driven gains and are nearly back to where they were at the start of the year
WTI for January delivery lost $1.17 to settle at $76.112 a barrel in New York.
Brent for February settlement lost $1.49 to settle at $81.21 a barrel.
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