Crude oil prices fell, at the end of trading today, Monday, February 27, to record the first drop in 3 consecutive sessions.
This comes amid fears of an economic recession, which has offset gains arising from Russia’s plans to deepen oil supply cuts.
Crude oil prices today
At the end of the session, Brent crude futures prices – for delivery in April 2023 – fell by 0.8%, to reach $82.45 a barrel.
The price of US West Texas crude futures – for April 2023 delivery – decreased by 0.8%, to $ 75.68 a barrel, according to data viewed by the specialized energy platform.
Crude oil prices ended their trading, on Friday, February 24, with an increase of more than 1%, to continue to reap gains for the second session in a row.
During the past week, Brent crude achieved a weekly gain of about 0.2%, while WTI recorded a slight weekly loss of 0.03%.
Oil market conditions
The US dollar hovered near a 7-week peak on Monday after a series of strong US economic data reinforced the view that the Federal Reserve will have to raise interest rates more and for a longer period.
A higher dollar usually makes commodities priced in the US currency more expensive for holders of other currencies.
“Crude oil continues to take the trend from sentiment in the broader financial markets,” said Vanda Insights founder of energy markets Vandana Hari.
Fears of Fed hawks returned to the fore on Friday, after the personal consumption expenditures price index jumped 0.6% last month, after rising 0.2% in December.
“If risk aversion continues to grow, it is likely that crude oil prices will come under renewed pressure,” said Harry, according to Reuters.
oil supply
Data from the Energy Information Administration showed that, in addition to downward pressure, US crude oil inventories rose to the highest level since May 2021 last week.
“The EIA data continues to raise more questions rather than provide clarity on markets,” analysts at consulting firm Energy Aspects said in a note, referring to the sharp supply revision in the data that contributed to the build.
On the supply side, Russia plans to cut oil exports from its western ports by up to 25% in March versus February, exceeding previously announced production cuts by 5% of its production for the month.
Oil prices in the war year
Crude oil prices have fallen by about a sixth in the year since February 24, 2022, when Russian forces first marched into Ukraine.
The chief executive of Polish refiner BK In Orlin said on Saturday that Russia had halted oil supplies to Poland through the Druzhba pipeline, a day after Poland delivered its first Leopard tanks to Ukraine.
Two weeks after the invasion, crude oil prices jumped to a record high of nearly $128 a barrel on supply concerns, but have since eased on fears of a global economic slowdown.
Separately, investors are preparing for manufacturing opinion polls in China this week; To get a clear trend regarding oil demand.
China holds its annual parliamentary meeting starting this weekend, and will see new economic goals and policies.
“We expect the government to emphasize the priority of supporting growth and calling for more political support,” Ning Zhang, chief China economist at investment bank UBS, said in a note.
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