SINGAPORE: Essential oil prices fell on Friday amid recession fears and a stronger U. S. money, though losses had been capped by supply concerns after Moscow’s new mobilisation advertising campaign in its war with Ukraine and an apparent deadlock within talks on refreshing the Iran nuclear deal.
Brent crude futures fell 46 cents, or 0. 5%, to $90. 00 per barrel at 0630 GMT, while Oughout. S. West Texas Intermediate (WTI) primitive futures were also down 46 cents, or 0. 55%, to $83. 03.
Front-month Brent and WTI contracts were down one 4% and second . 4%, respectively, for the week so far.
“In the wake of accelerating rate hikes by the major central banks, the risk of a global economic recession overshadows supply problems in the oil markets, despite the recent escalation in the Russia-Ukraine battle, ” said CMC Markets analyst Tina Teng.
“However, a sharp fall in the U. S. SPR and drawdown within inventories may still keep oil prices supported at some point as there is still an inevitable undersupply problems in the physical marketplaces, while Iran’s nuclear deal is in stalemate, ” she said, referring to crude oil in the U. S. Strategic Petroleum Reserve which usually dropped last week in order to its lowest considering that 1984.
Following the U. S. Federal Reserve’s hefty 75-basis-point increase on Wednesday for a third time, central banks around the world also followed match in hiking rates of interest, raising the risk of financial slowdowns.
“Crude prices remain volatile as energy investors grapple with a deteriorating demand outlook which is still vulnerable to disadvantages, ” said Edward Moya, senior marketplace analysts at OANDA, in a note.
“Supply risks and tight market conditions should give oil some support over the $80 level, but a quicker tumble to a global recession will keep costs heavy. ”
A senior Oughout. S. State Department official said that efforts to revive the 2015 Iran nuclear offer have stalled because of Tehran’s insistence on the closure of the Oughout. N. nuclear watchdog’s investigations, easing anticipation of a resurgence of Iranian crude oil. — Reuters