Adedapo Adesanya
By Adedapo Adesanya
Oil steadied on Thursday on mixed data about the state of the economy in the United States and looming sanctions on Russian energy products, which fell Brent crude futures by 5 cents to $82.79 a barrel, with West Texas Intermediate crude (WTI) rising by 3 cents to $76.44 per barrel.
An indicator of slowing in the US economy came as new orders for US manufactured goods rose broadly in December, while orders for industrial equipment and other machinery fell, according to the latest data from the Commerce Department.
The department said on Thursday that factory orders increased 1.8 per cent after dropping 1.9 per cent, while orders increased 11.8 per cent on a year-on-year basis in December.
The US Federal Reserve’s fastest cycle of interest rate hikes since the 1980s, aimed at fighting inflation, is undercutting demand for crude oil and other goods.
Pressure also came from a rebound in the US Dollar index, which hit a nine-month low earlier in the session on softer US Federal Reserve rate hike bets also weighed on oil prices.
A stronger greenback makes Dollar-priced oil more expensive for holders of other currencies.
The US Fed raised its target interest rate by a quarter of a percentage point on Wednesday but continued to promise ongoing increases in borrowing costs as part of its battle against inflation.
Meanwhile, helping to keep oil from moving lower was a European Union ban on Russian refined products is set to take effect on February 5, potentially dealing a blow to global supply.
EU countries will seek a deal on Friday on a European Commission proposal to set price caps on Russian oil products after postponing a decision on Wednesday because of divisions among member states.
European Commission President, Ms Ursula von der Leyen and a team of 15 commissioners arrived in Kyiv, the capital of Ukraine, on February 2 for the first-ever joint meeting with Ukraine’s government.
The focus will be on Russia’s invasion, launched on February 24 last year, and Ukraine’s bid for membership to the bloc on the agenda.
Ms Von Der Leyen also promised a 10th round Of sanctions on Russia.
The Commission proposed last week that from February 5, the EU apply a price cap of $100 a barrel on premium Russian oil products such as diesel and a $45 per barrel cap on discounted products such as fuel oil.
Meanwhile, a panel of the Organisation of the Petroleum Exporting Countries and its allies, OPEC+, endorsed the producer group’s current output policy at a meeting on Wednesday.
This leaves production cuts agreed upon last year unchanged amid hopes of higher Chinese demand and uncertain prospects for Russian supply.
