Oil closed lower, giving back the gains recorded earlier, with the strengthening of the dollar abroad and caution with the prospects for growth in the face of signs of higher interest rates for longer in the United States. The market was also affected by the turmoil in the Chinese real estate sector, which led to uncertainty about demand in the Asian country.
The WTI contract for November fell 0.39% (US$0.35), at US$89.68 per barrel, on the New York Mercantile Exchange (Nymex), and Brent for December fell 0.09% (US$ 0.08), at US$ 91.88 per barrel, on the Intercontinental Exchange (ICE).
“The ‘king’ dollar will continue to be a headwind for oil, but that may not last much longer. Hedge fund bets on oil are getting crowded as the latest data shows bullish bets are at levels highest since February 2022,” wrote Edward Moya, senior market analyst at Oanda. Moya noted that as risks to $100-a-barrel oil rise, energy traders await a new catalyst.
Goldman Sachs predicts a slowdown in consumption growth during the autumn and winter in the Northern Hemisphere, but considers it unlikely that higher oil prices will cause a decrease in consumer spending and US GDP. The bank considers the magnitude of the increase in oil prices to be small and believes that the increase in gasoline prices should be partially offset by higher investments in the energy sector and lower electricity prices. For the bank, it is unlikely that the Federal Reserve (Fed, the American central bank) will tighten monetary policy in response to higher oil prices, according to a report signed by analysts, including Jan Hatzius.
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