ISLAMABAD, :ind report Crude oil prices fell on Tuesday on signs that US policymakers are likely to keep interest rates higher for longer amid sticky inflation data expected on Wednesday.
As of 1400 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $0.42 (-0.50 percent) to reach $82.94 a barrel. Similarly, the West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $0.49 (-0.62 percent) to $78.63 a barrel.
On the other hand, the price of Arab Light increased by $0.81 (+0.95 percent) to reach $86.34 a barrel. Similarly, the price of Russian Sokol increased by $0.83 (+1.08 percent) to $77.37 a barrel. On the other hand, the price for Opec Basket decreased by $0.86 (-1.02 percent) to $83.43 a barrel.
The analysts expect the US central bank to keep its policy rate on hold for longer, supporting the dollar and making dollar-denominated oil more expensive for investors holding other currencies. Borrowing costs in the United States have been stuck at high levels since last July in an effort to curb sticky inflation. Still, the US consumer price data, expected on Wednesday, will have a sharper impact on the timing of the much-awaited rate cut, which could spur economic growth and therefore oil demand.
Meanwhile, the Organization of the Petroleum Exporting Countries on Tuesday stuck to its forecast for relatively strong growth in global oil demand in 2024 and said there was a chance the world economy could do better than expected this year. The OPEC monthly report said world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025.
Oil prices have fallen by about 7 percent since reaching a six-month high of $91.17 a barrel in early April when Houthi attacks on ships in the Red Sea and the war between Israel and Hamas sparked concerns of a broader conflict.
On the local front, the government is likely to cut the price of petrol by another Rs12.8 per litre for the second half of May 2024, in line with the decline in international prices. Price estimates till May 13 indicate international petroleum product prices have fallen significantly compared to the last fortnight. The decline would be on top of the Rs5.45 cut from the last fortnight when the government lowered the price to Rs288.49 per litre. Moreover, the government is expected to cut the price of high-speed diesel (HSD) by around Rs8.3 per litre due to a drop in its international price.
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