Crude oil prices fell about 1%, during trading today, Friday, March 10 (2023), for the fourth session, heading for its largest weekly loss in 5 weeks.
This comes due to fears of the possibility of sharp increases in interest rates in the United States; This leads to slower growth and damage to the demand for oil.
Crude oil prices today
By 07:20 a.m. GMT (10:20 a.m. Mecca time), the prices of benchmark Brent crude futures – for May 2023 delivery – fell by 0.67%, to reach $81.04 a barrel.
The price of US West Texas crude futures – delivery in April 2023 – decreased by 0.94%, to $ 75.01 a barrel, according to data viewed by the specialized energy platform.
Crude oil prices ended their trading, yesterday, Thursday, March 9, down by more than 1%, after a volatile session, amid fears of an economic recession that threatens demand.
Economic recession
Expectations of higher interest rates in the world’s largest economy and in Europe have clouded global growth prospects, pushing both benchmarks (Brent and WTI) down more than 5.5% so far this week, in their worst declines since early February.
US Federal Reserve Chairman Jerome Powell warned against raising interest rates further and possibly faster, saying the Fed was wrong to initially believe inflation was “temporary” and was surprised by the strength of the labor market.
The job market is still seen as tight, even after the number of Americans filing new claims for unemployment benefits increased by more than 5 months last week.
“Investors are becoming more cautious,” analysts from Haitong Futures said in a note.
The expectation of a faster rate hike in the US on Friday sent sharp falls in financial markets, and analysts expect crude oil prices to be under pressure as well.
“All eyes are on US data due later in the day, which is the most important clue before the Fed raises interest rates,” said Haitong analysts.
oil supplies
On the supply side, the US in particular urged some commodity traders to undo concerns about shipping priced Russian oil in an effort to shore up supplies; Which indicates that more Russian crude may flow into the market.
Investors are closely watching export cuts from Russia, which decided to cut oil production by 500,000 barrels per day in March.
Russia also plans to reduce oil exports and transit from its western ports in March by 10% on a daily basis compared to shipments in February.
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