On Wednesday, March 8, 2023, oil prices moved with no clear direction before the release of U.S. employment numbers. A barrel of North Sea Brent crude for May delivery rose 0.07 percent to $83.35, while a barrel of U.S. West Texas Intermediate (WTI) for April delivery gave up 0.12 percent to $77.49. The release of the U.S. employment figures on Friday could support expectations of a further rate hike by the Fed. According to Stephen Brennock of PVM Energy, “a robust number will endorse a sharp rise in interest rates later this month.”
Fed’s monetary policy could weigh on activity and consumption of black gold
Comments by Jerome Powell, the head of the U.S. central bank (Fed), suggesting a further acceleration in the pace of rate hikes, have largely weighed on crude oil prices. A tighter monetary policy could weigh on the world’s largest economy by increasing the cost of credit for households and businesses, and weighing on activity and consumption of black gold.
The market awaits the weekly figures on American stocks
The market is also awaiting the weekly release of the U.S. Energy Information Agency’s (IEA) U.S. inventory report for the week ending March 3. The results could impact oil prices and determine the direction of the markets.
Gas prices up slightly in Europe
On the natural gas side, the Dutch TTF futures contract, considered the European benchmark, was trading below 45 euros per megawatt-hour (MWh) at 44.80 euros. After falling on Monday to a new low of nearly 18 months at 41.39 euros, the European gas market has seen “a modest upward adjustment over the past two days,” say analysts at Energi Danmark. Prices are recovering slightly due to “signs that the cold snap on the continent will last a little longer than expected,” they continue, which should support demand for gas for heating.
Geopolitical tensions around the Nord Stream 1 and 2 gas pipelines in the Baltic Sea
On Tuesday, March 7, 2023, the New York Times claimed on the basis of information consulted by U.S. intelligence, that a “pro-Ukrainian group” would be behind the sabotage last year of the Nord Stream 1 and 2 gas pipelines in the Baltic Sea, but without the involvement of Ukrainian President Volodymyr Zelensky. Kiev denied any involvement on Wednesday.
