Oil prices are up weekly for the first time in over a month. Fuel prices are propped up by hopes of an early agreement on raising the US government’s debt ceiling. A deal prevents the United States from defaulting on its debt obligations.
A barrel of American WTI oil (159 litres) now costs more than $ 72 again and has become about 3 percent more expensive this week. A barrel of Brent, the benchmark for oil from Europe, the Middle East and Africa, currently costs more than $ 76. In addition to the hope of a debt deal in the US, the oil price is also being driven by purchases of crude oil by some Asian refineries, according to traders. In addition, the US plans to replenish strategic oil reserves further support the price.
Oil prices are still well below early April levels. Then the unexpected decision by oil cartel OPEC+ to further cut production caused a major spurt. At the time, a barrel of American oil cost more than $ 80 and a barrel of Brent oil about $ 85. This increase led to the recommended price for a litre of Euro95 in the Netherlands rising again to above 2 euros.
Oil prices have fallen by about 10 percent since the beginning of this year. This is due to China’s moderate economic recovery after the release of the corona measures in that country. As a result, Chinese oil demand is disappointing. In addition, interest rate hikes by the US central bank are also depressing oil prices.
Higher interest rates in the US are driving the dollar exchange rate. A strong dollar could reduce the demand for oil by making fuel more expensive for countries with other currencies. Higher interest rates also increase borrowing costs, which slows down the economy and may reduce oil demand. The Federal Reserve did indicate at the latest interest rate decision that it may stop further rate hikes.