- BIST10011,722-2.89%
- USD49.45+0.05%
- EUR55.62+0.37%
- GOLD4,181.10+0.26%
- INTEREST37.00%-1.00
- BITCOIN81,450-0.06%
- October 17, 202614°
- BIST10011,722-2.89%
- USD49.45+0.05%
- EUR55.62+0.37%
- GOLD4,181.10+0.26%
- INTEREST37.00%-1.00
- BITCOIN81,450-0.06%
- October 17, 202614°
US House decision pushes Brent crude prices lower
The November Brent crude futures contract fell 0.6% to $108.06 per barrel as of 09:27 today. The US House of Representatives’ decision on the conflict with Iran and expectations for a Federal Reserve rate hike put pressure on prices.
The November Brent crude futures contract fell 0.6% to $108.06 per barrel as of 09:27 today. After rising as high as $109.45 yesterday, the price ended the day at $108.75.
The October West Texas Intermediate crude futures contract stood at $104.71 per barrel at the same time.
US House decision supports the decline
One of the main factors behind the downward movement in oil markets was the US House of Representatives’ passage of a war powers resolution calling for American forces to withdraw from the conflict with Iran.
The resolution calls for US President Donald Trump to be instructed to withdraw American forces from the conflict with Iran. The House has thus approved a similar war powers resolution for the third time.
Democratic Representative Gregory Meeks, a member of the House Foreign Affairs Committee, said the United States had been involved in the conflict for nearly 200 days. Meeks argued that the Trump administration had failed to achieve its stated objectives and cited rising gasoline prices and mortgage rates, inflation, billions of dollars in public spending, and casualties suffered by the US military among the costs of the conflict.
The decision increased downward pressure on oil prices by strengthening expectations that tensions between Washington and Tehran could ease.
Fed rate decision in focus
Expectations that the Federal Reserve will tighten monetary policy were also among the factors weighing on oil prices. At its July meeting, the Fed kept its policy rate unchanged in the 3.50%-3.75% range. The bank is expected to raise interest rates by 25 basis points in its decision to be announced on September 16.
Although a possible rate hike would not directly eliminate supply problems, it could constrain economic activity and oil demand in the United States, the world’s largest oil consumer.
Russia-Ukraine energy infrastructure under watch
Initiatives led by Donald Trump to halt reciprocal attacks on energy infrastructure between Russia and Ukraine helped ease concerns about global energy supplies.
Trump said Ukraine and Russia had agreed not to strike each other’s energy facilities. He also said that the main cause of the global increase in diesel prices was not Iran but, to a large extent, the Russia-Ukraine War.
Ukrainian President Volodymyr Zelenskyy said attacks had been carried out on oil refineries and drone production facilities in Russia, while Russia continued to target Ukraine’s energy system and critical infrastructure. Russian Foreign Ministry spokesperson Maria Zakharova said the proposal for an energy ceasefire needed to be backed by concrete steps.
Initiatives to halt attacks on energy infrastructure strengthened expectations that the risk of supply disruptions could decrease, supporting the decline in oil prices.
Pipeline disruption in Saudi Arabia poses a risk
Saudi Arabia’s East-West Petroline, which bypasses the Strait of Hormuz, was shut down following the attacks on September 10. This kept alive concerns that supply disruptions could affect shipments.
Some September oil shipments scheduled to be sent to Europe on September 15 were canceled. If the disruption to the pipeline continues, up to 4% of global oil supplies could remain at risk.
From a technical perspective, $114.79 is being monitored as resistance and $101.74 as a support level for Brent crude.
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