- Oil prices declined by 1% in the early Asian market trade on Tuesday, following a recent three-week low.
- A client note reported that crude oil prices reached $90 a barrel, with concerns arising over the cost of storing inventories amidst a narrow supply.
The oil market saw a 1 per cent decline in prices in the Asian trading session in the early hours of Tuesday following a recent three-week low. As reported in a client note, crude oil prices fell to $90 a barrel. The tightening supply of crude oil has been a critical factor in recent market dynamics. However, rising interest rates raise concerns about the cost of storing inventories. This situation may prompt further destocking of oil inventories, potentially increasing spot availability.
On Monday, the US Dollar surged to a 10-month high against a basket of major currencies. This impressive rally came as the US government avoided a partial shutdown. Additionally, positive economic data has increased expectations that the Federal Reserve may decide to maintain higher interest rates for longer.
The prospect of a prolonged interest rate hike has led to discussions about the possible impact on economic growth. The combination of these factors continues to paint a volatile picture for the global oil market, with investors closely monitoring developments to gain insight into future price movements.