15 December 2022 | Other

Oil rally continues amid Keystone pipeline shutdown, imminent cold snap, and Fed policy

Oil prices keep rising for the third day in a row as part of the shutdown of Canadian pipeline Keystone, being crucial to refineries in the western part of the U.S. The cost of fuel continues to rise due to the accident, despite a significant weekly surge in the U.S.crude stocks.

Analysts predict that the Federal Reserve is going to revise the chosen course of monetary tightening. The pace of interest rate hikes in the country is expected to slow down for the first time since March 2022, thereby having a positive effect on market sentiment towards oil. Renewed economic growth in China after the COVID-19 pandemic, with a recovery of automobile and air traffic, also supported an upturn in the oil market. 

John Kilduff, a co-founder of the energy hedge fund Again Capital, said that adverse weather conditions are likely to persist over the Christmas holiday season. Therefore, there are all grounds to assume that the oil market growth is justified. 

OPEC+ members expect fuel demand to grow by 2.25 million bpd. So, demand could reach 101.8 million bpd over the next year, with the potential for growth from China, the world's largest importer.

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