Crude oil prices fell, during trading today, Friday, May 12 (2023), for the third session in a row, and are heading to record their fourth weekly losses.
This comes with renewed economic concerns in the United States and China, which exceeded expectations of fuel demand growth in the two largest oil consuming countries in the world.
Crude oil prices today
By 07:01 AM GMT (10:01 AM Mecca time), Brent crude futures – for delivery in July 2023 – were down 0.52%, to $74.59 a barrel.
US West Texas Intermediate crude futures – for June 2023 delivery – also decreased by 0.44%, to record $ 70.56 a barrel, according to data seen by the specialized energy platform.
Crude oil prices ended their trading, yesterday, Thursday, May 11, with a decline of more than 2%, with the rise of the US dollar, and amid fears of an economic recession.
Both benchmarks (Brent, West Texas Intermediate) are heading to record losses of about 1.1% this week, which is the longest series of weekly declines since November 2021.
Oil price analysis
With talks over the US government’s debt ceiling stalled and fears renewed that another regional bank is in crisis, there is growing concern that the US is entering a recession.
The decline in new loans to companies in China and weak economic data, earlier in the week, refocused doubts about its recovery from Corona restrictions that led to growth in oil demand.
“Additionally, cooler inflation data from both countries indicated that consumer demand was weak,” said Tina Teng, market analyst at CMC Markets.
“Oil is a growth-sensitive commodity that has been affected by these downside factors,” said CMC Markets analyst, Reuters reported.
strategic oil reserves
Crude oil prices rose earlier on Friday, after falling in the previous two sessions, on some demand expectations following comments from the US Secretary of Energy that the US may buy back oil for the Strategic Petroleum Reserve once some sales end in June.
The US government has said it will buy oil when prices are stable at or below $67 to $72 a barrel.
However; Talks about raising the US federal debt limit of $31.4 trillion may not reach an agreement in time to prevent a government debt default; This could cause severe market turbulence.
Shares of US regional bank Backwest Bancorp fell 23% on Thursday, after it said its deposits had fallen and posted more guarantees to the US Federal Reserve to boost liquidity.
China April consumer price data rose at a slower pace and missed expectations, while factory gate contraction deepened; Which indicates that more stimulus may be needed.
The oil market has largely ignored the Organization of the Petroleum Exporting Countries (OPEC) forecast for global oil demand for 2023, which expected increased demand in China, the world’s largest oil importer.
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