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Oil prices fall more than 9% so far this week
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Fed raises rates, opens door to pause in tightening cycle
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ECB raises interest rates by 25 bps in inflation fight
(Updates prices)
By Rowena Edwards
LONDON, May 4 (Reuters) - Oil prices were stable after
the European Central Bank (ECB) decided on Thursday to slow
interest rate hikes, but were unable to claw back much of this
week's more than 9% decline as demand concerns in major
consuming countries weighed.
Brent futures were up 9 cents, or 0.12%, to $72.42 a
barrel at 1338 GMT. U.S. West Texas Intermediate (WTI) crude fell 13 cents, or 0.19%, to $68.47.
The European Central Bank (ECB) eased the pace of its
interest rate hikes and kept its options open on future moves as
it fights stubbornly high euro zone inflation.
The 25 basis point increase to the ECB's three policy rates
was the smallest since it started lifting them last summer.
"Today's decision signals that the ECB has entered the final
stage of its current tightening cycle," ING said in a note.
Oil prices have plunged this week on concerns about the U.S. economy and signs of weak manufacturing growth in the world's largest oil importer China, sliding further after the U.S. Federal Reserve raised interest rates on Wednesday. That capped near-term economic growth prospects. However the market has seen some support from the Fed's signal that it may pause further interest rate increases to give officials time to assess the fallout from recent bank failures and to gain clarity on the dispute over raising the U.S. debt ceiling.
"With the Fed possibly pausing, the debt ceiling hopefully
resolved this month, the OPEC+ cut felt in a few weeks' time and
global demand picking up in the second half of the year, we are
growing in conviction that the question is not how low oil
prices will fall, but how long," oil broker PVM's Tamas Varga
said.
The Organization of the Petroleum Exporting Countries
(OPEC)and allies including Russia, a group known as OPEC+,
started voluntary output cuts at the beginning of May.
Deputy Prime Minister Alexander Novak said on Thursday
Russia was abiding by its voluntary pledge to cut oil output by
500,000 barrels per day (bpd) from February until the end of the
year.
(Reporting by Rowena Edwards in London; Additional reporting by
Sudarshan Varadhan in Singapore and Stephanie Kelly in New York;
Editing by Jan Harvey, Mark Potter and Alexander Smith)
