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Oil prices recover on Fed signals and geopolitical tensions

EditorPollock Mondal
Published 11/03/2023, 09:50 AM
Updated 11/03/2023, 09:50 AM
© Reuters.

Oil prices, including West Texas Intermediate (WTI) and Brent for January settlement, saw an uptick recently, breaking a three-day losing streak. The WTI settled above $82 a barrel, while Brent surpassed $86.85 a barrel. This rebound has been attributed to multiple factors, including the Federal Reserve's signals of ending interest rate hikes and a decrease in the dollar value.

Another significant factor was US intelligence reports indicating that Russia’s Wagner Group may supply air defense weapons to Iran-backed Hezbollah. This geopolitical tension further boosted oil prices.

Despite these positive influences, crude continues to trade below pre-war levels. Fears of regional conflict disrupting oil supplies and a manufacturing contraction in China are contributing to these lower prices. An agreement between Israel, Egypt, and Hamas allowing some refugees to flee Gaza conflict zones through a Qatar-mediated deal has partially eased concerns but not enough to fully restore crude prices.

US President Joe Biden's call for a pause in fighting hasn't fully alleviated fears either, indicating that geopolitical tensions continue to play a significant role in oil market dynamics. The market is closely watching these developments and their potential impact on future crude demand.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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