Oil prices rose on Friday as a spill at Iraq’s Basra terminal appeared likely to constrain crude supply, but remained on track for a weekly decline on fears that hefty interest rate increases will curb global economic growth and demand for fuel.
Brent crude futures were up 70 cents, or 0.8%, at $91.54 a barrel by 1743 GMT.
US West Texas Intermediate (WTI) crude futures gained 30 cents, or 0.4%, to reach $85.40.
Both benchmarks were down about 1% on the week, hurt partly by the US dollar’s strong run, which makes oil more expensive for buyers using other currencies. The dollar index was largely flat on the day, but on track for its fourth weekly gain in five weeks. In the third quarter so far, both Brent and WTI are down about 20% for the biggest quarterly percentage declines since the start of the Covid-19 pandemic in 2020.
“Oil exports from Iraq’s Basra oil terminal are being gradually resumed after they were halted last night due to a spillage, which has been contained,” Basra Oil Company said. The spill at the port, which has four loading platforms and can export up to 1.8 mln barrels per day, drove up prices on the prospect of lower global crude supply.
“That definitely threw a scare into the market because the initial report was that those barrels were going to be out of the market for some time,” said John Kilduff, partner at Again Capital LLC in New York.
Investors are bracing for a large increase to US interest rates, which could lead to a recession and reduce fuel demand. The Federal Reserve is widely expected to raise its benchmark overnight interest rate by 75 basis points at a Sept 20-21 policy meeting.
Published in The Express Tribune, September 17th, 2022.
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