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HomeEconomyOil falls more than 2% as investors weigh bearish risk MPNRC
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Oil falls more than 2% as investors weigh bearish risk MPNRC

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NEW YORK (Reuters) – Oil prices continued to pull back on Thursday, plunging more than 2% as investors assess recession risk and a reassessment of fuel demand amid a hike in interest rates in major economies.

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US West Texas Intermediate (WTI) crude futures were down $2.6, or 2.7%, at $103.46 a barrel by 0330 GMT. Brent crude futures were down $2.5, or 2.3%, at $109.22 a barrel.

After falling nearly 3% in the previous session, both benchmarks fell to $3 a barrel in the morning of Asian trade. They are at their lowest level since mid-May.

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Investors are continuing to assess how concerned they should be about central banks potentially pushing the world economy into recession as they attempt to contain inflation with interest rate hikes.

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“Oil markets remained under pressure as investors worried that a hike in US rates would lead to an economic recovery and dampen fuel demand,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co., Ltd.

“US and European hedge funds are selling their positions before the end of the second quarter, which is also cooling investor sentiment,” he said, adding that WTI from the US$100 a barrel before the July 4 holiday may fall down. ,

US Federal Reserve chief Jerome Powell said on Wednesday that the central bank was not trying to plan for a recession to contain inflation, but was fully committed to bringing prices under control, even though doing so could lead to an economic downturn. Risk of recession.

Analysts at Haitong Futures wrote: “More data proves that the supply side of Russian crude oil is less affected by sanctions, as previously predicted, the supply side could see higher-than-expected growth in the near term.”

President Vladimir Putin said on Wednesday that Russia is in the process of resuming its trade and oil exports to countries from the BRICS grouping of emerging economies in the wake of Western sanctions on Ukraine.

China’s crude oil imports from Russia in May were up 55% from a year earlier and a record high.

Meanwhile, US President Joe Biden called on Congress to pass a three-month suspension of the federal gasoline tax to help tackle record pump prices and provide temporary relief for American families this summer.

“This news temporarily boosted oil product prices, but it was later observed that even if the gasoline tax was suspended, retail prices would remain high, making it difficult to stimulate demand,” said Fujitomi. K Saito said.

The US Energy Information Administration said its weekly oil data, which was scheduled for release on Thursday, would be delayed until at least next week due to system issues.

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