# Oil falls as earthquake impact on crude eases, rate hike fears rise
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-02-09
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Crude Prices Ease as Turkey Earthquake Spares Oil
Meta Description: Get the latest on crude prices following the earthquake in Turkey and Syria. Find out how infrastructure damage and oil inventories are impacting the market.
URL: https://financedigest.com/oil-falls-as-earthquake-impact-on-crude-eases-rate-hike-fears-risehtml

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By Laila Kearney

NEW YORK (Reuters) -Crude prices eased on Thursday as oil infrastructure appeared to have escaped serious damage from the earthquake that devastated parts of Turkey and Syria, while U.S. inventories swelled and investors worried about Federal Reserve [rate hikes](https://www.financedigest.com/wall-street-slips-dollar-gains-as-fed-seen-hiking-rates-in-may.html "Wall Street slips, dollar gains as Fed seen hiking rates in May"). Brent crude settled at $84.50 a barrel, losing 59 cents, or 0.7%. U.S. West Texas Intermediate (WTI) crude futures settled at $78.06 a barrel, down 41 cents, or 0.5%. Both benchmarks have gained more than 5% so far this week. The earthquake, which has killed more than 19,000 people, initially sent [oil prices](https://www.financedigest.com/shares-fall-with-oil-prices-amid-concerns-about-u-s-fed-rate-hikes.html "Shares fall with oil prices amid concerns about U.S. Fed rate hikes") higher on the prospect that the disaster would seriously damage pipelines and other infrastructure and displace crude from the global market for an extended period. We won’t be losing that supply for as long as we thought,” said John Kilduff, [partner at Again Capital](https://www.financedigest.com/sequant-capital-partners-with-hitbtc-to-launch-a-dedicated-service-for-professional-cryptocurrency-traders.html "Sequant Capital partners with HitBTC to launch a dedicated service for professional cryptocurrency traders") in New York. BP Azerbaijan declared force majeure on Azeri crude shipments from the Turkish port of Ceyhan on Tuesday after the quake struck early on Monday. Azeri [oil continues to flow there via pipeline](https://www.financedigest.com/keystone-oil-pipeline-restart-timetable-unclear-traders-worry-about-supply.html "Keystone oil pipeline restart timetable unclear; traders worry about supply"), BP Azerbaijan said on Thursday. A strong U.S. jobs report [raised fears](https://www.financedigest.com/cisco-forecast-raise-allays-tech-spending-fears-lifts-shares.html "Cisco forecast raise allays tech spending fears, lifts shares") that the U.S. Federal Reserve would continue to aggressively [hike rates](https://www.financedigest.com/stocks-falter-as-economic-worries-nag-nz-delivers-big-rate-hike.html "Stocks falter as economic worries nag, NZ delivers big rate hike") to cool inflation, pressuring risk assets like oil and equities. U.S. [crude stocks](https://www.financedigest.com/oil-dips-after-fed-comments-us-crude-stock-build.html "Oil dips after Fed comments, US crude stock build") rose last week to 455.1 million barrels, their highest since June 2021, the Energy Information Administration reported on Wednesday, which also pushed oil prices lower. Gasoline and distillate inventories also rose last week, the EIA said, during unseasonably [mild winter](https://www.financedigest.com/winter-weather-could-be-mild-german-met-office-dwd-says.html "Winter weather could be mild, German met office DWD says") months. The prospect of stronger [demand from China provided some support to oil](https://www.financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-high.html "Oil gains after IEA sees demand rising to record high") prices, as the world’s second largest oil consumer ended more than three years of stringent zero-COVID policy. We expect Chinese oil consumption to increase by around 1.0 million barrels a day this year, with strong growth emerging as early as [late in Q1,” analysts from ANZ bank wrote in a note](https://www.financedigest.com/in-loving-and-devoted-memory-king-charles-handwritten-note-to-late-queen.html "‘In loving and devoted memory’: King Charles handwritten note to late queen"). Overall, this should push [global demand up by 2.1 million](https://www.financedigest.com/black-panther-sequel-ignites-box-office-with-330-million-global-debut.html "‘Black Panther’ sequel ignites box office with 0 million global debut") barrels a day in 2023.” Brent’s front-month loading contract rose to a $3-a-barrel premium over contracts six months out, a market structure called backwardation, which indicates traders seeing tight current supply. A weaker U.S. dollar, which typically [trades inversely with oil](https://www.financedigest.com/ing-toughens-oil-and-gas-policy-to-include-trade-finance-midstream.html "ING toughens oil and gas policy to include trade finance, midstream"), also helped limit losses in crude prices. The dollar index fell 0.7% to 102.74.

(Additional reporting by Shadia Nasralla AND Muyu Xu; Editing by Bernadette Baum, Jason Neely, Arun Koyyur, Jane Merriman, David Gregorio and Mark Heinrich)


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