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HomeCanadian NewsOil climbs as greenback slips, however demand outlook clouds market

Oil climbs as greenback slips, however demand outlook clouds market


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MELBOURNE, Nov 18 (Reuters) –

Oil costs rose on Friday because the greenback slipped however had been headed for hefty weekly losses on expectations there will probably be no let-up in sharp U.S. rate of interest hikes and the prospect of weaker demand from prime oil importer China amid rising COVID-19 circumstances.

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Brent crude futures clawed again 67 cents, up 0.8% to $90.45 a barrel at 0130 GMT, however weren’t far off a four-week low of $89.53 hit within the earlier session.

U.S. West Texas Intermediate (WTI) crude futures rose 70 cents, or 0.9%, to $82.34 a barrel, however held close to a six-week low.

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A slight decline within the greenback helped oil costs on Friday, as a weaker buck makes oil cheaper for consumers holding different currencies.

Nonetheless WTI is down greater than 7% up to now this week, whereas Brent is down almost 6%.

Analysts mentioned considerations about potential lockdowns in China to curb a surge in COVID circumstances, which hit their highest stage since April, and worries that extra rate of interest hikes will drive the U.S. financial system into recession solid a pall over the market.

“Oil costs stay below strain, with demand squeezed by mounting China COVID-19 circumstances and fears of extra aggressive hikes in U.S. rates of interest,” mentioned Stephen Innes, managing companion at SPI Asset Administration, in a notice to purchasers.

Remarks from U.S. Federal Reserve officers this week dashed hopes of any tempering of aggressive U.S. rate of interest hikes.

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China reported 25,353 new COVID-19 infections on Nov. 17 up from 23,276 new circumstances a day earlier, the Nationwide Well being Fee mentioned on Friday.

“The coverage settings within the metropolis of Guangzhou in southern China, the place COVID-19 circumstances have surged considerably, will probably be necessary to observe,” Commonwealth Financial institution commodities analyst Vivek Dhar mentioned in a notice.

Recession considerations have dominated this week even with the European Union’s ban on Russian crude looming on Dec. 5 and the Group of the Petroleum Exporting Nations and allies, collectively referred to as OPEC+, tightening provide. (Reporting by Sonali Paul in Melbourne; Enhancing by Ana Nicolaci da Costa)

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