Oil prices fall for a second day on concerns for expected recession

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Oil prices fell for a second day on Monday on fears of lower fuel demand from an expected global recession sparked by rising worldwide interest rates.

Brent crude futures for November settlement slipped $1.35 to $84.80 a barrel.The contract fell to as low at $84.51, the lowest since Jan. 14.

U.S. West Texas Intermediate (WTI) crude futures for November delivery dropped $1.15, to $77.59 a barrel. WTI declined to as low as $77.21, the lowest since Jan. 6.

Both contracts slumped around 5% on Friday.

The dollar index that measures the greenback against a basket of major currencies climbed to a 20-year high on Monday.

A stronger greenback tends to curtail demand for dollar-denominated oil since buyers using other currencies must spend more to buy crude.

Central banks in numerous oil-consuming countries, including the United States, the world’s biggest crude user, have raised interest rates to fight surging inflation which has led to concerns the tightening could trigger an economic slowdown.

Sachdeva expects WTI prices could find a floor at $75 a barrel, while for Brent $80 will act as a cushion.

The disruptions in the oil market from the Russia-Ukraine war, with European Union sanctions banning Russian crude set to start in December, has lent some support to prices.

The chief executive officer of energy trader Vitol, Russell Hardy, said that fuel shipments are being affected with Russian oil products expected to flow to Asia and the Middle East while supplies from their go to Europe.

Additionally, Hardy told an oil conference in Singapore that more than a million barrels per day (bpd) of U.S. crude is expected to go to Europe to fill the gap in Russian supplies.




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