NEW YORK (Reuters) – Brent crude futures rose for a third straight session on Thursday, falling below $ 100 a barrel as fears of a possible global recession raised concerns about oil demand.
Brent crude futures fell 94 cents, or 0.9%, to 3 99.75 a barrel in a session of 3 98.50. WTI crude futures fell 79 cents, or 0.8%, to 97.74 a barrel.
Both benchmarks closed at their lowest levels since Wednesday, April 11th. Despite tight global supply, it declined on Tuesday. WTI fell 8% while Brent fell 9% – a fall of $ 10.73 which was the third largest for the deal since the start of trading in 1988.
“Oil is declining with little new information about production or consumption,” said Stephen Ines, managing partner at SPI Asset Management.
“Still, with commodity traders turning extremely risk-averse due to rising demand and yet (US) Fed policy concerns, the risk at the head of the recession seems to be hanging around the market.”
Rising interest rates by central banks around the world to fight inflation have pushed oil prices down along with other commodities such as metals and palm oil, raising fears of a slowdown that could dampen demand for commodities.
“It looks like market prices are starting to rise in that situation,” said Warren Patterson, head of commodity research at ING, referring to the recession.
However, he added that it is difficult to see a further decline in oil prices as Brent monthly spreads are broadly backward, indicating tight supply. Prices are immediately higher than in future months in a backward market.
Traders are looking at possible oil supply disruptions at the Caspian Pipeline Consortium (CPC), which has been asked by a Russian court to suspend activities for 30 days. Exports in the CPC, which handles 1% of global oil supplies, were still flowing through Wednesday morning.
In addition, investors waited Thursday for US government data that will shed light on the state of the domestic oil and fuel inventory.
According to market sources, industry data on Wednesday showed that US crude inventories rose by about 3.8 million barrels last week. Gasoline inventory fell 1.8 million barrels, while distillate stocks fell about 635,000 barrels.