US oil settles below $100 a barrel on economic worries and strong dollar

0
54

The price of U.S. crude oil settled below $100 a barrel on Tuesday at its lowest level in two weeks, as demand prospects come under pressure from coronavirus lockdowns in China and growing recession risks, while that a strong dollar has made crude more expensive for buyers using other currencies.

The price of U.S. crude oil settled below $100 a barrel on Tuesday at its lowest level in two weeks, as demand prospects come under pressure from coronavirus lockdowns in China and growing recession risks, while that a strong dollar has made crude more expensive for buyers using other currencies.

U.S. West Texas Intermediate crude stood $3.33, or 3.2%, at $99.76 a barrel, while Brent crude fell $3.48, or 3.28%, at $102.46 per barrel. Both benchmarks fell for a second straight day and fell more than $4 a barrel earlier on Tuesday.

Major Wall Street indexes also fell in volatile trading on concerns about aggressive monetary policy tightening and slowing economic growth.

See also  Police reassure Aucklanders of their presence in the community amid a wave of gun violence

Early in the session, comments from the Saudi and Emirati energy ministers pushed Brent and WTI higher by more than a dollar a barrel.

“These are volatile times, the daily price bars are out of proportion these days,” said John Kilduff, partner at Again Capital LLC.

“As the EU continues to dither over whether or not to embargo Russian oil, it also changes the math a lot both ways,” he added.

The Commission of the European Union was slow to act on the proposal. Unanimity is required to ban oil imports from Russia, and while a French minister said EU members could reach a deal this week, Hungary was quick to oppose to an embargo.

In addition, some European economies could suffer if Russian oil imports are further reduced. If Russia retaliates by cutting gas supplies, the economies of emerging countries in Europe, Central Asia and North Africa could return to pre-pandemic levels, the European Bank for Reconstruction and development (EBRD).

In addition to the G7’s recent phasing out of Russian oil imports, Japan, which got 4% of its oil imports from Russia last year, has agreed to phase out those purchases. The timing and method are yet to be determined.

See also  Learner drivers pay over £200 for black market tests

“The combination of COVID-related lockdowns in China and interest rate hikes around the world to fight inflation has put equity investors on their toes, strengthened the dollar and raised considerable concerns about the slowdown. economic,” said Tamas Varga of broker PVM Oil Associates.

With a sharp drop in demand in China due to lockdowns and Russian barrels discounted in the market, China is becoming more selective in the crude oil it buys, said Robert Yawger, executive director of futures at energy at Mizuho.

Cleveland Federal Reserve Chair Loretta Mester said raising U.S. interest rates in half-percentage-point increments “makes perfect sense” for the U.S. central bank’s next two policy meetings. , while Bundesbank chief Joachim Nagel said the European Central Bank is expected to raise interest rates in July. .

The dollar held near a two-decade high ahead of an inflation reading that could hint at the Fed’s policy outlook.

See also  Car sales May 2022: Tata Motors records highest monthly sales in its history; Ships 43,341 units

On the supply side, the U.S. Energy Information Administration has lowered its U.S. crude oil production forecast for 2022 and 2023. It now forecasts an average production of 11.9 million barrels. per day (bpd) in 2022, compared to a previous estimate of 12 million bpd.

Crude inventories rose 1.6 million barrels for the week ended May 6, market sources said, citing figures from the American Petroleum Institute, while analysts polled by Reuters had expected a drawdown of 500,000 barrels.[API/S][EIA/S]

Stocks of crude and petroleum products at European refiners stood at around 1 billion barrels in April, down 10.3% on an annual basis but almost the same level as in March, according to Euroilstock data. . Middle distillate inventories fell 15.4% year on year in April and nearly 3% from March, the data showed.

comments

(follow The AU Times on Social Platforms.)

For the latest car news and reviews, follow TAUT.com on TwitterFacebook and subscribe to our YouTube channel.

.

LEAVE A REPLY

Please enter your comment!
Please enter your name here