Crude oil prices fell during trading today, Monday, May 15 (2023), for the third consecutive session, amid fears of an economic recession that threatens demand.
Growing concerns about fuel demand in the world’s two largest oil consumers, the United States and China, offset bullish sentiments about tightening supplies from OPEC+ cuts and the resumption of buying in America to support the strategic oil reserves.
Crude oil prices today
By 07:08 AM GMT (10:08 AM Mecca time), Brent crude futures – for delivery in July 2023 – were down 0.27%, to $73.97 a barrel.
US West Texas Intermediate crude futures – for June 2023 delivery – also fell by 0.20%, to record $69.90 a barrel, according to data seen by the specialized energy platform.
Crude oil prices ended their trading, on Friday, May 12, with a decrease of more than 1%, at the end of trading for the third consecutive session, to record its fourth weekly loss.
Oil price analysis
Last week, both benchmarks (Brent, West Texas Intermediate) fell for the fourth week in a row, the longest series of weekly declines since September 2022, due to fears that the United States might enter a recession due to a “high risk” of a historic default in the oil market. Payment within the first two weeks of June.
Investors sought safe havens such as the US dollar, which strengthened the currency and made dollar-denominated commodities more expensive for holders of other currencies.
“Crude oil prices remain under pressure due to the stagnant demand outlook as the reopening of the Chinese economy appears to be zigzagging,” said CMC Markets analyst Tina Ting.
He added that the defeat of US banks in light of the banking crisis in the United States also caused market tension, according to Reuters.
demand for oil
Teng said investors will look to a slew of economic data in China on industrial production, fixed asset investment and retail sales next week for signs of improving oil demand.
Analyst at IG, Tony Sycamore, said: “With an uneven reopening in China and concerns that the US is facing slowing growth at a time when the debt ceiling deadline is fast approaching, with a rally in the US dollar are all factors weighing on sentiment. market towards crude oil.
However, global crude supplies may contract in the second half as the OPEC+ alliance makes additional production cuts that reduce the availability of sour crude.
And 9 countries in the coalition led by Saudi Arabia and Russia announced in April a voluntary reduction in production by about 1.6 million barrels per day, bringing the total volume of cuts to 3.66 million barrels per day.
For his part, Iraqi Oil Minister Hayan Abdul Ghani said that his country does not expect OPEC + to make further cuts in oil production at its next meeting in June.
strategic oil reserves
Energy Secretary Jennifer Granholm told lawmakers on Thursday that the United States could start buying back oil for the Strategic Petroleum Reserve after completing a sale approved by Congress in June.
This announcement was followed by a weekly report issued by the energy services company “Baker Hughes”, which showed that the number of US oil rigs decreased by two to 586 this week, the lowest level since June 2022, while the number of gas rigs decreased by two to 141 rigs.
Meanwhile, G7 leaders may announce new measures at their May 19-21 meetings aimed at evading sanctions involving third countries, officials with direct knowledge of the discussions said.
Officials noted that tougher sanctions would also seek to undermine Russia’s energy production in the future and curb trade that supports the Russian military.
India and China, the world’s No. 3 and No. 1 crude oil importers, respectively, are the main buyers of Russian crude since the EU embargo began in December.
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