{"id":1503,"date":"2022-09-15T16:36:18","date_gmt":"2022-09-15T16:36:18","guid":{"rendered":"http:\/\/roydadnaft.ir\/English\/?p=1503"},"modified":"2022-09-15T16:36:21","modified_gmt":"2022-09-15T16:36:21","slug":"oil-slumps-4-on-u-s-rail-agreement-demand-concerns","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/1503\/","title":{"rendered":"Oil slumps 4% on U.S. rail agreement, demand concerns"},"content":{"rendered":"
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Oil futures fell about 4% to a one-week low on Thursday on a tentative agreement that would avert a U.S. rail strike, expectations for weaker global demand and continued U.S. dollar strength ahead of a potentially large interest rate increase.<\/p>\n\n\n\n

Brent futures fell $3.75, or 4.0%, to $90.35 a barrel by 10:50 a.m. EDT (1450 GMT), while U.S. West Texas Intermediate (WTI) crude fell $3.58, or 4.1%, to $84.90.<\/p>\n\n\n\n

That puts both benchmarks on track for their lowest closes since Sept. 8.<\/p>\n\n\n\n

U.S. railway parties have agreed to a cooling-off period as a standard part of the ratification process after reaching a tentative deal overnight, a move that would avert any shutdown in case unions fail to ratify it, according to a source familiar with the situation.\u00a0<\/p>\n\n\n\n

The prospect of a strike lent the market some support on Wednesday.<\/p>\n\n\n\n

That rail deal also helped pressure U.S. diesel and gasoline futures to drop over 5% during the session.<\/p>\n\n\n\n

“The oil complex is drafting back down on U.S. dollar strength and the tentative agreement that would avert a U.S. rail workers strike,” analysts at energy consulting firm Ritterbusch and Associates said, noting crack spreads were weak.<\/p>\n\n\n\n

The U.S. 3:2:1 crack spread – a measure of refining profit margins – was on track for its lowest close since late February.<\/p>\n\n\n\n

The U.S. dollar <\/p>\n\n\n\n

A stronger dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies.<\/p>\n\n\n\n

The International Energy Agency said this week that oil demand growth would grind to a halt in the fourth quarter.<\/p>\n\n\n\n

Crude prices have dropped substantially after a surge close to its all-time highs in March after Russia’s invasion of Ukraine added to supply concerns, pressured by the prospects of recession and weaker demand.<\/p>\n\n\n\n

New clashes between Armenia and Azerbaijan, an oil producer, linked to a decades-old dispute between the ex-Soviet states raised another risk to supplies, although a senior Armenian official said on Wednesday a truce had been agreed.<\/p>\n\n\n\n

“Whilst challenging the $100 hurdle is currently not a dead cert, it seems that a bottom at around $90 has been found basis Brent, largely thanks to war-related supply fears,” said Tamas Varga of oil broker PVM.<\/p>\n\n\n\n

Other factors weighing on oil prices included an increase in U.S. crude inventories and an expected reduction in energy use by the Ethereum blockchain.<\/p>\n\n\n\n

U.S. crude stocks rose by a more than expected 2.4 million barrels, boosted by a record weekly release from the Strategic Petroleum Reserve, which is scheduled to end next month.<\/p>\n\n\n\n

The European Union’s executive, meanwhile, plans to raise more than 140 billion euros ($140 billion) to shield consumers from soaring energy prices by skimming off revenues from low-cost electricity generators and making fossil fuel firms share windfall profits. <\/p>\n

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