ISLAMABAD
Crude oil futures edged lower on Wednesday amid profit-taking and a stronger US dollar. As of 0930 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $0.64 (-0.73 percent) to reach $86.74 a barrel. Similarly, the West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $0.87 (-1.04 percent) to $82.60 a barrel.
On the other hand, the price of Arab Light increased by $0.97 (+1.12 percent) to reach $87.65 a barrel. Similarly, the price of Russian Sokol increased by $0.94 (+1.19 percent) to $79.98. Following suit, the price for Opec Basket increased to $86.71 a barrel with an uptick of $1.97 (+2.32 percent). Brent ended the last week higher by 3.97 percent, increasing to $85.34 from $82.08 a barrel. WTI also closed the week higher to $81.04 from $78.01 a barrel, registering a weekly increase of 3.88 percent.
Profit-taking could be a reason for the downside movement as the oil prices are at multi-month high. The recent price rally has been supported by improving demand outlook and signs of supply reduction. Meanwhile, the US dollar index climbed higher for a fifth straight session after recent data pointed to a resilient US economy. A stronger dollar makes oil more expensive for investors holding other currencies, dampening demand.
Traders looked ahead to the Federal Reserve’s interest rate announcement later on Wednesday for signs of its rate path for the rest of the year.
Earlier, oil prices gained as Ukraine’s attacks on Russian refineries stoked fears of a supply disruption. The strikes on Russian refineries added $2-$3 per barrel of risk premium to crude last week, which remains in place at present. On Saturday, one of the strikes sparked a brief fire at the Slavyansk refinery in Kasnodar, which processes 8.5 million metric tons of crude oil a year, or 170,000 barrels per day. On Wednesday, Ukraine’s drone strikes resulted in a fire at Rosneft’s largest refinery. The incident stood out as one of the most severe attacks on Russia’s energy sector in recent months. TLTP
