Oil prices rise amid political news

MOSCOW, 22 Sep — PRIME. World oil prices are rising on Thursday evening, markets are reacting to news from the world of politics, it follows from the trading data.

As of 19.41 Moscow time, the price of November futures for Brent crude oil is growing by 0.89%, to $90.63 per barrel, November futures for WTI – by 1.12%, to $83.87.

Oil prices are rising as investors fear for the offer. Fears about the lack of “black gold” in the markets intensified after the decree of the President of the Russian Federation on the beginning of partial mobilization. The MarketWatch portal cites the opinion of Warren Patterson, head of the commodity strategy department at ING Groep NV, who believes that the decision of the President of the Russian Federation fuels investors’ fears about interruptions in the supply of Russian energy resources. Russia is one of the largest oil producers in the world and has been a major supplier of oil and gas to the EU.

Political news overpowers the factors of oil price decline. In particular, the increase in key rates in the countries of the world has a negative impact. So, on Wednesday, the US Federal Reserve System (FRS) raised the base interest rate by 75 basis points – to the level of 3-3.25% per annum. At the same time, Fed Chairman Jerome Powell said that by the end of 2022 the rate could be increased by another 125 basis points. In addition, earlier on Thursday, the Bank of England expectedly raised its base interest rate by 50 basis points to 2.25% from 1.75%.

Traders fear that a sharp increase in key rates will lead to a slowdown in economic activity and the start of a global recession. Under such conditions, the demand for energy resources, including oil, tends to decrease.