June 16, 2023 (MLN): Oil prices were mixed on Friday after yesterday's rally attributed to the U.S. decision to purchase 12 million barrels of oil in 2023, strategically aimed at boosting reserves.
Brent crude is currently trading at $75.13 per barrel, down by 0.42% on the day.
While West Texas Intermediate crude (WTI) is trading at $70.29 per barrel, down by 0.55% on the day.
Yesterday, both benchmarks, Brent crude and WTI marked a rise of 2.77% respectively.
On Thursday, European Central Bank (ECB) increased the benchmark refinancing interest rate by 25 basis points to 3.75%-4%.
Interest rates and oil demand are inversely related, higher interest rates increase borrowing costs which could slow economic growth hence oil demand.
In the United States, data released on Thursday showed retail sales unexpectedly rose in May, along with higher-than-expected jobless claims last week, as Reuters reported
The U.S. dollar index (DXY), which tracks the performance of the U.S. dollar against a basket of other currencies fell to a five-week low.
However, there is a prevailing expectation of a negative economic outlook attributed to China’s industrial output and retail sales growth in May falling short of expectations
Edward Moya, an analyst at OANDA said in a note, "Crude prices are trying to find support as the global growth outlook remains vulnerable to further shocks from aggressive rate hiking campaigns."
