Dollar higher on safety bid as data spurs growth worries

NEW YORK, June 23 (Reuters) – The dollar rose against the euro on Friday after dismal business activity data from around the globe soured risk sentiment and as hawkish comments from central banks added to pressure on riskier currencies.

US business activity fell to a three-month low in June as services growth eased for the first time this year and the contraction in the manufacturing sector deepened, closely watched survey data out Friday showed.

The overall picture, though, indicated US economic growth ticked up a notch in the second quarter even as worries persist that the Federal Reserve’s aggressive interest rate increases over the past year will trigger a recession.

Earlier in the session data showed euro zone business growth virtually stalled in June. A downturn in manufacturing deepened, while activity in the bloc’s dominant services sector barely expanded, as overall demand fell for the first time since January.

“We’re starting to see signals from businesses that the demand is starting to ease up at the margin and that’s leading to recalibration of expectations of what future output looks like,” said Bipan Rai, North America head of FX strategy at CIBC Capital Markets.

“I do think that the concern with the future outlook is weighing on risk appetite right now and the dollar is catching somewhat bid off of that,” Rai said.

The euro fell 0.57% to USD 1.08925, a three-day low against the US dollar. The dollar index, which measures the currency against six rivals, rose 0.49% to 102.89.

Traders squaring books as the end of the month and the quarter nears was also likely supporting the US currency, Rai said.

Friday’s data arrived after rate hike surprises and hawkish comments from central banks globally which have renewed market fears that policymakers have further to go in tightening policy to tame inflation, even at the risk of tipping their economies into a recession.

“After bigger than expected rate hikes in the UK and Norway yesterday, the markets are nervous about upside rate surprises, and that was helping the dollar overnight, even before we saw the European PMI data,” Kit Juckes, chief FX strategist at Societe Generale, said in a note.

Fed Chair Jerome Powell said on Thursday the central bank would move interest rates at a “careful pace” from here, but ruled out interest rate cuts “happening any time soon.”

Against the yen, the dollar was up 0.44% at 143.76 yen, its strongest level in more than seven months. The Japanese currency has come under renewed pressure as the Bank of Japan (BOJ) maintains an ultra-dovish stance.

Data out on Friday showed that Japan’s core consumer inflation exceeded forecasts in May and an index excluding fuel costs rose at the fastest annual pace in 42 years, putting pressure on the BOJ to phase out its massive stimulus.

The pound was down 0.30% on Friday at USD 1.271, on pace to finish the week down about 1%, its largest weekly loss in six weeks.

The British currency has come under pressure from rising expectations the UK economy could slip into recession after the Bank of England on Thursday delivered an outsized rate hike in response to persistent inflation.

The Australian and New Zealand dollars struggled on Friday as traders avoided riskier currencies.

The Aussie fell 1.16% to USD 0.6678 and was headed for a weekly loss of nearly 3%, its worst week since late August. The kiwi slid 0.62% to USD 0.6139, down about 1.6% for the week.

In cryptocurrencies, bitcoin rose 3.46% to a 1-year high of USD 30,924, on pace for a near 17% gain for the week, its best weekly gain since mid-March, boosted by BlackRock’s (BLK) plan to create a bitcoin exchange-traded fund.

(Reporting by Saqib Iqbal Ahmed; Additional reporting by Rae Wee and Farouq Suleiman; Editing by Muralikumar Anantharaman, Andrea Ricci and Grant McCool)

Gold on track for worst week since Feb on hawkish Fed

June 23 (Reuters) – Gold prices on Friday were heading for their biggest weekly percentage fall in over four months, weighed by a stronger dollar and hawkish comments by Federal Reserve officials.

Spot gold rose 0.3% to USD 1,919.99 per ounce as of 2:19 p.m. EDT (1819 GMT), after adding as much as 1.2% on a retreat in US bond yields.

US gold futures settled 0.3% higher at USD 1,929.6.

The dollar index rose 0.5% to a one-week peak against its rivals, making gold less attractive for other currency holders.

The dollar strengthened after Fed Chair Jerome Powell, in congressional testimony this week, signaled more interest rate hikes ahead but vowed the central bank would proceed with caution.

“Powell was pretty hawkish. He favors more interest rate hikes and doesn’t see any rate cuts anytime soon. That is pretty bearish on the metals,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

San Francisco Fed Bank President Mary Daly said on Friday in an interview with Reuters that two more rate hikes this year is a “very reasonable” projection.

Higher US interest rates increase the opportunity cost of holding gold.

Bullion has fallen nearly 2% so far this week and has lost more than USD 150 since scaling above the key USD 2,000 level in early May.

“Investor appetite lacks conviction in gold,” Standard Chartered analyst Suki Cooper said in a note.

“The sharp drop in exposure since the last (Fed) meeting does not necessarily suggest imminent short-covering activity, but it does underscore a shift in sentiment as we head into a seasonally slower period for demand.”

Spot silver rose 0.5% to USD 22.34 per ounce, but was set for its biggest weekly drop since October 2022. Platinum was down 0.6% at USD 917.34, on course for its worst week since August 2022.

Palladium steadied at USD 1,283.18 after hitting its lowest since May 2019 on Thursday.

Palladium could extend this year’s near-30% price decline as demand is threatened by the rapid development and use of electric vehicles.

(Reporting by Deep Vakil and Brijesh Patel in Bengaluru; editing by Barbara Lewis, Pooja Desai and Richard Chang)

Global equity funds see over USD 15 billion in outflows on rate hike worries

June 23 (Reuters) – Global equity funds suffered substantial outflows during the seven days to June 21 amid concerns over borrowing costs staying higher for longer as the European Central Bank raised interest rates and the Federal Reserve signaled more hikes.

Investors withdrew a net USD 15.12 billion from global equity funds which had seen net inflows of USD 16.04 billion a week earlier.

Fed Chair Jerome Powell struck a hawkish tone in his testimony before the US House Financial Services Committee on Wednesday, noting that a majority of policymakers expected two more quarter-point rate hikes by year-end.

The Bank of England surprised investors by raising interest rates by half a percentage point on Thursday, saying it would take more time for inflationary pressures to subside.

The US and European equity funds witnessed outflows of USD 16.47 billion and USD 1.81 billion, respectively, while investors pumped about USD 2.6 billion into Asian funds.

Healthcare and industrial sectors saw USD 1.14 billion and USD 174 million worth of net selling, respectively. Financials attracted about USD 710 million worth of inflows.

Meanwhile, global bond funds extended their inflows streak to a 14th straight week, with about USD 4.07 billion flowing in.

Global government and corporate bond funds attracted about USD 1.9 billion each. Meanwhile, high yield, loan participation, and convertible funds suffered outflows of about USD 400 million each.

Meanwhile, investors withdrew a net USD 15.13 billion from money market funds, their second straight week of outflows.

Among commodity funds, investors withdrew USD 498 million from precious metal funds, their fourth successive week of net selling. Energy funds also saw USD 176 million in outflows.

Data for 24,028 emerging market funds showed that investors secured a net USD 714 million worth of bond funds in their third straight week of net buying. They also purchased USD 812 million of equity funds.

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Vinay Dwivedi)

Oil dips on demand worries as more rate hikes likely

HOUSTON, June 23 (Reuters) – Oil prices settled lower on Friday, posting a weekly decline as traders worried interest rate hikes could sap demand despite signs of tighter supplies including lower US crude stocks.

In a second straight day of losses, Brent crude closed down 29 cents, or 0.4%, to USD 73.85 a barrel. US West Texas Intermediate (WTI) crude fell 35 cents, or 0.5%, at USD 69.16.

On Thursday, Brent dropped about USD 3 a barrel after the Bank of England raised interest rates by a bigger-than-expected half a percentage point. Central banks in Norway and Switzerland also hiked rates.

The benchmarks declined more than 3.5% for the week.

More US interest rate hikes also seemed likelier. San Francisco Federal Reserve Bank President Mary Daly said two more rate hikes this year was a “very reasonable” projection.

“There seems to be a growing ‘risk back off’ type of trade now in crude, triggered by the interest rate rises in the EU and disappointing stimulus numbers out of China,” said Dennis Kissler, senior vice president of trading at BOK Financial.

The Bank of England rate rise triggered fund liquidation and energy producers were moving to a “hedge now” mentality, Kissler added.

Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and reduce oil demand.

Risk-aversion among investors also boosted the value of the US dollar, which pressures oil prices by making the commodity more expensive for other currency holders.

US business activity also fell to a three-month low in June as services growth eased for the first time this year and the contraction in the manufacturing sector deepened, survey data showed.

Wall Street’s main indexes fell, while gold prices were on track for their biggest weekly decline since early February.

China’s promising economic recovery has faltered with several months in a row of softer-than-expected consumption, production, and property market data.

The recession and demand concerns outweighed signs of supply-side tightness.

US energy firms this week cut the number of oil rigs operating for an eighth week in a row, energy services firm Baker Hughes Co (BKR) said. US oil rig count, an indicator of future output, fell 6 to 546 this week, the lowest since April 2022.

This week’s US inventory report showed crude stocks posted a surprise decline of 3.8 million barrels.

Also set to tighten the market is Saudi Arabia’s production cut of 1 million barrels per day in July announced along with an OPEC+ deal to limit supplies into 2024.

Money managers raised their net long US crude futures and options positions in New York and London by 4,790 contracts to 78,064 in the week to June 20, the US Commodity Futures Trading Commission (CFTC) said on Friday.

(Additional reporting by Alex Lawler and Sudarshan Varadhan; Editing by Kirsten Donovan, Louise Heavens, David Gregorio, and David Evans)

Another round of rate hikes, macro data on tap

June 23 (Reuters) – Asian markets will be waking up to a jolt of central bank rate hikes and looking ahead to a big round of macro data on Friday.

The Bank of England surprised many investors on Thursday by raising interest rates by a bigger-than-expected half a percentage point, lifting its main interest rate to 5%, the highest since 2008.

England wasn’t alone: The Swiss National Bank raised its policy rate and signaled more tightening was likely, while Norway’s central bank raised its key policy rate to a 15-year high.

In the US, Federal Reserve Chair Jerome Powell told a Congressional hearing that the central bank would move interest rates at a “careful pace” from here after pausing hikes at its last meeting.

The hawkish moves seemed to dent risk appetite. In Europe, the STOXX 600 index briefly hit its lowest point in nearly three months. On Wall Street, the S&P 500 and Nasdaq ended higher, but stocks broadly were on pace to tally weekly losses.

Oil prices fell sharply as the BoE’s bigger-than-expected hike prompted worries about the economy and fuel demand.

The US dollar advanced after Powell’s rate comments, with the greenback rising to its strongest level against the yen in more than seven months.

The mood could shift on Friday, as data will give a glimpse into how much central bank tightening is weighing on global growth.

The release of Purchasing Managers’ Indexes (PMIs) from around the world will offer a fresh look into demand trends and evidence of the health of the manufacturing sector in the United States, Europe and Japan so far in June.

Here are key developments that could provide more direction to markets on Friday:

– Global Purchasing Managers’ indexes (June)

– Japan CPI (May)

– Malaysia, Singapore CPI (May)

(By Lewis Krauskopf; editing by Deepa Babington)

Dollar, yields rise after Powell comments, Bank of England rate hike

NEW YORK, June 22 (Reuters) – The US dollar and Treasury yields climbed on Thursday as Federal Reserve Chair Jerome Powell suggested more US interest rate hikes may be needed to curb inflation and the Bank of England (BoE) delivered a bigger-than-expected rate hike.

A global stock index was little changed.

The Swiss National Bank and Norges Bank also hiked their benchmark rates, underscoring central bank worries about global inflation while fueling concern about the impact of rate hikes on demand.

The BoE announced a half-point rate hike to 5%. Though the size of the hike surprised markets, expectations for BoE rate tightening surged in recent days.

Before Thursday’s decision, investors expected the BoE’s Bank Rate to peak at 6% by the end of the year. By contrast, economists polled by Reuters last week saw a 5% peak.

Powell, in his second day of testimony to lawmakers, suggested again the US central bank has not reached the end of its tightening cycle.

In addition, Fed Governor Michelle Bowman, at an event in Cleveland, said “additional policy rate increases” will be needed to control inflation.

“Investors need to recognize the reality that central banks around the world are going to continue to fight inflation aggressively,” said Oliver Pursche, senior vice president and adviser for Wealthspire Advisors in Westport, Connecticut.

Last week, the Fed held its benchmark interest rate steady at between 5% and 5.25%, but most policymakers see at least two more quarter-point rate increases by the end of this year.

On Wednesday, Powell said in remarks to lawmakers in Washington that the outlook for two more 25-basis-point rate increases are “a pretty good guess” of where the central bank is heading if the economy continues in its current direction.

The dollar index, which measures the currency against six rivals, rose 0.4% to 102.41. Against the yen, the dollar was up 0.9% at 143.12 yen.

Both sterling and the Swiss franc were last weaker against the dollar in volatile trade.

US Treasury yields rose as investors focused on the hawkish comments from Powell.

In afternoon trading, the yield on 10-year Treasury notes was up 7.6 basis points at 3.798%.

On Wall Street, stocks ended mostly higher, with consumer discretionary and technology shares among the day’s biggest gainers.

The Dow Jones Industrial Average fell 4.81 points, or 0.01%, to 33,946.71, the S&P 500 gained 16.2 points, or 0.37%, to 4,381.89, and the Nasdaq Composite added 128.41 points, or 0.95%, to 13,630.61.

The pan-European STOXX 600 index lost 0.51% and MSCI’s gauge of stocks across the globe gained 0.05%.

In commodities, Chicago Board of Trade corn and soybean futures posted sharp declines after profit-taking, while oil futures fell amid worries over fuel demand.

US crude fell USD 3.02 to settle at USD 69.51 a barrel, while Brent dropped USD 2.98 to USD 74.14.

(Reporting by Caroline Valetkevitch; additional reporting by Amanda Cooper and Marc Jones in London, and Ankur Banerjee in Singapore; Editing by David Evans, Leslie Adler and Jamie Freed)

Dollar up on risk aversion; sterling, Swiss franc slip despite rate hikes

NEW YORK, June 22 (Reuters) – The US dollar advanced against a basket of currencies on Thursday after Fed Chair Jerome Powell backed more US rate increases albeit at a “careful pace” and as a spate of interest rate hikes by several central banks fueled concerns over the outlook for global growth.

Sterling was volatile, the Swiss franc fell and the Norwegian crown rose on Thursday after the Bank of England (BoE), the Swiss National Bank (SNB), and Norges Bank all hiked their benchmark interest rates.

The slew of rate hikes come a day after Powell told lawmakers on Capitol Hill further rate increases were “a pretty good guess” of where the central bank was heading if the economy continued in its current direction.

During the second day of testimony, Powell said the central bank would move interest rates at a “careful pace” from here.

Asked about rate cuts, Powell said “we don’t see that happening any time soon … It is going to have to wait a time when we’re confident that inflation is moving down to 2%,” the Fed’s inflation target.

The dollar index, which measures the currency against six rivals, rose 0.372% to 102.4. Against the yen, the dollar was up 0.85% at 143.1 yen, its strongest level in more than seven months.

The Australian dollar, viewed as a liquid proxy for risk appetite, fell 0.58%.

“I believe the doom and gloom are back as a dominating narrative across markets now,” said Juan Perez, director of trading at Monex.

“It legitimately feels like while a recession may not entirely materialize, stagflation – low economic levels combined with stubborn inflation – is a tale to be had for the second half of the year,” Perez said.

US data on Thursday showed the number of people filing for state unemployment benefits for the first time held steady at a 20-month high last week, remaining elevated for a third straight week in what may be an early indication of a softening labor market.

UP, UP, AND AWAY

Sterling was 0.17% lower at USD 1.27465 in a choppy session after the BoE’s Monetary Policy Committee (MPC) voted 7-2 to raise its main interest rate to 5% from 4.5%, its highest since 2008 and its largest rate increase since February.

After inflation data held at 8.7% in May, defying market expectations and making it the highest of any major economy, investors had been split on how big the new BoE hike would be.

“They (the BOE) are trying to jump in front of inflation but at what cost? The mortgage market is seizing, the cost of living crisis is not easing and the GBP is going to be caught in the crossfire,” Brad Bechtel, global head of FX at Jefferies, said in a note.

The Swiss franc was about 0.3% lower against the greenback after the Swiss National Bank (SNB) hiked its benchmark interest rate by 25 basis points to 1.75%, defying some market expectations of a bigger increase.

Despite an easing in Swiss inflation, currently the lowest among G10 economies at 2.2%, SNB Chairman Thomas Jordan recently repeated his readiness to raise rates, encouraging markets to expect a 50-bps hike.

“Unlike the ECB (European Central Bank) and the Fed (Federal Reserve), the SNB can proceed slowly and steadily with its monetary policy tightening,” said Thomas Gitzel, chief economist at VP Bank Group in Liechtenstein.

Against the Norwegian crown, the dollar was about 0.05% lower after having slipped by as much as 1.3% after the Norges Bank raised its benchmark interest rate by 50 bps to a 15-year high, more than expected by a majority of economists surveyed by Reuters, and said it aimed for another hike in August.

In cryptocurrencies, bitcoin was up 0.37% at USD 30,119, on pace for a fourth straight day of gains after hitting its highest level since mid-April, boosted by BlackRock’s (BLK) plan to create a bitcoin exchange-traded fund (ETF) even as the sector faces US regulatory scrutiny.

(Reporting by Saqib Iqbal Ahmed in New York; Additional reporting by Joice Alves in London; Editing by Alex Richardson and Matthew Lewis)

Gold hits three-month low in hawkish Fed’s shadow

June 22 (Reuters) – Gold dropped nearly 1% to a three-month low on Thursday after US Federal Reserve Chair Jerome Powell’s testimony, with the possibility of more rate hikes overriding any support from signs of a softer labor market.

Spot gold was down 0.9% at USD 1,914.19 per ounce by 2:34 p.m. EDT (1834 GMT) and is set for its fifth consecutive daily decline for the first time in four months.

US gold futures settled 1.1% lower to USD 1,923.70.

Gold briefly pared some losses after data showed US jobless claims held steady at a 20-month high last week, potentially signaling a softening labor market in the face of the Fed’s aggressive rate hikes, but bullion soon hastened its retreat.

“Powell’s message today was that the economy remains resilient, and it is likely we get more rate hikes,” said Tai Wong, a New York-based independent metals trader, who saw gold trading in a new lower range of USD 1,895-USD 1,945 in the short term.

Powell said the central bank would move interest rates at a “careful pace” as policymakers edge towards a stopping point after 10 consecutive raises until their June meeting.

The dollar rebounded from a more than one-month low hit earlier, making gold less attractive, while Treasury yields also gained.

But Powell’s hawkish tilt did little to sway investors who kept bets for only one additional rate increase this year, followed by cuts in January.

Although gold is considered an inflation hedge, high interest rates to curb price pressures dampen the appeal of the zero-yield asset.

Silver fell 0.9% to USD 22.43 per ounce, while platinum was down 2% at USD 922.32, with both hitting multi-month lows.

Palladium shed 4.9% to USD 1,280.87, its lowest since May 2019.

“Palladium was comfortably trading below the USD 1,400 level, once it broke from that level, the technical selling was fairly easy to continue,” said Edward Moya, senior market analyst at OANDA.

(Reporting by Deep Vakil and Ashitha Shivaprasad in Bengaluru; Editing by Krishna Chandra Eluri and Maju Samuel)

Dollar slips as Powell’s testimony offers little surprise; sterling steady

Reuters – The dollar languished near a one-month low against a basket of currencies on Thursday, after Federal Reserve Chair Jerome Powell stuck to his usual messaging at his semi-annual testimony, offering little room for surprise.

Sterling was perched near a one-year high ahead of the Bank of England’s (BoE) interest rate decision later in the day, with Wednesday’s hot inflation report likely to keep policymakers on their toes.

In remarks to lawmakers on Capitol Hill on Wednesday, Powell said further US rate increases are “a pretty good guess” of where the Fed is heading if the economy continues in its current direction. Those comments were in line with what the central bank said at its policy meeting last week.

The US dollar index last stood at 102.09, not far from its recent five-week low of 102.00, after having fallen nearly 0.5% in the previous session.

Trading was thinned in Asia with Hong Kong and China closed for a holiday.

The euro EUR rose to a more than one-month high of USD 1.0995, extending Wednesday’s 0.65% jump.

“Markets had priced in a lot of hawkishness from Powell prior to his testimony, so his comments didn’t really surprise too much on the hawkish end,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia (CBA).

“At this stage, (markets) are not convinced that the FOMC can do two more rate hikes this year.”

Elsewhere, sterling GBP fell 0.1% to USD 1.2755.

The BoE is set to raise interest rates for a 13th time in a row later on Thursday, a day after inflation data came in higher than expected, though traders are split between a 25-basis-point and 50bp hike.

British inflation failed to ease in May and held at 8.7%, defying market expectations and making it the highest of any major economy.

“The strong UK inflation data raised the probability of a larger hike than 25bp, a higher terminal rate and rates staying higher for longer,” said economists at ANZ in a note.

Against the Japanese yen, the dollar slipped 0.05% to 141.81, having touched a seven-month peak of 142.37 yen in the previous session.

The Japanese currency has come under renewed pressure as the Bank of Japan (BOJ) continues to stick to its ultra-dovish stance. BOJ board member Asahi Noguchi said on Thursday the central bank must maintain an ultra-loose monetary policy to ensure wages, seen as key to driving inflation to its 2% target, continue to increase as a trend.

Waiting for stimulus

In Asia, the Chinese offshore yuan languished near Wednesday’s seven-month trough and last bought 7.1823 per dollar, as traders remained on the lookout for greater support measures from Beijing to revive China’s faltering economic recovery.

“Until we get the confirmation on a stimulus package, (the yuan) will likely remain under downward pressure because of the soft outlook for the Chinese economy and that will in turn likely be a headwind for the Aussie as well,” said CBA’s Kong.

The Australian dollar AUD fell 0.51% to USD 0.6762, while the kiwi dipped 0.2% to USD 0.6190.

In cryptocurrencies, Bitcoin gained more than 1% to USD 30,339, having risen above the USD 30,000 level for the first time since April on Wednesday, boosted by BlackRock’s plan to create a bitcoin exchange-traded fund (ETF) even as the sector faces US regulatory scrutiny.

“The dark clouds overshadowing crypto have lifted in recent days amid a burst of institutional interest,” said Kate Laurence, co-founder and CEO of Bloccelerate VC.

“The likes of BlackRock, Charles Schwab, Fidelity and Citadel throwing their hats into the crypto ring is hugely significant because it shows that institutions are very serious about the space despite the recent regulatory crackdown.”

The Wall Street Journal reported on Tuesday that EDX Markets, a crypto exchange backed by Citadel Securities, Fidelity and Schwab, had started operations.

(Reporting by Rae Wee; Editing by Sam Holmes and Muralikumar Anantharaman)

Oil plunges 4% as interest rate hikes outweigh lower US oil supplies

NEW YORK, June 22 (Reuters) – Oil futures fell about 4% on Thursday, as a bigger-than-expected Bank of England rate hike prompted worries about the economy and fuel demand that outweighed support from a surprise draw in US oil supplies.

Brent futures settled down USD 2.98, or 3.9%, to USD 74.14 a barrel. US West Texas Intermediate (WTI) crude futures were down USD 3.02, or 4.2%, at USD 69.51.

The benchmarks erased gains from the previous session, during which US corn and soybean prices raced to multi-month highs, raising expectations that crop shortfalls could lower biofuels blending and increase oil demand.

The Bank of England raised interest rates by a bigger-than-expected half a percentage point to fight stubborn inflation. It was the central bank’s 13th straight rate hike.

Higher interest rates could slow economic growth and reduce oil demand.

Feeding caution, US Federal Reserve Chair Jerome Powell said two more rate hikes of 25 basis points each by the end of the year was “a pretty good guess.”

“We’re locked in a trading range but prices are held back by the concerns about the economy, the larger economy,” said Phil Flynn, an analyst at Price Futures Group.

Equities, which often move in tandem with oil, were also down.

In supply, US crude inventories fell by 3.8 million barrels in the last week to 463.3 million barrels, compared with analysts’ expectations in a Reuters poll for a 300,000-barrel rise.

US gasoline stocks rose by about 480,000 barrels in the week to 221.4 million barrels, the Energy Information Administration (EIA) said, compared with analysts’ expectations in a Reuters poll for a 100,000-barrel rise.

Distillate stockpiles, which include diesel and heating oil, rose by about 430,000 barrels in the week to 114.3 million barrels, versus expectations for a 700,000-barrel rise, the EIA data showed.

“Given the decline in crude oil and the very modest increases in refined products inventories, I would have thought we would get a better response from the market, but the crude oil and refined product market is simply being weighed down by higher interest rates,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

Investors are now awaiting Chinese factory activity data due next week, which could indicate the strength of China’s economy.

An executive at US shale producer EOG Resources EOG.N said oil prices could rise as muted increases in US oil production and cuts by OPEC+ producers will limit supply in the months ahead.

(Reporting by Stephanie Kelly; additional reporting by Shadia Nasralla and Jeslyn Lerh;
Editing by Conor Humphries, Mark Potter, and David Gregorio)

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