Oil prices fell, during trading today, Friday, June 23 (2023), to continue bleeding losses for the second session in a row, amid fears of a global recession that may limit demand.
Oil markets are heading for a weekly decline of more than 3%, with a higher-than-expected rise in interest rates in Britain and warnings of looming increases in the United States fueling concerns about demand.
Oil prices today
By 06:41 AM GMT (09:41 AM GMT), Brent crude futures – for August 2023 delivery – fell by 0.73%, to record $73.60 a barrel.
West Texas Intermediate crude futures – August 2023 delivery – fell by 0.85% to $68.92 a barrel, according to figures seen by the specialized energy platform.
And oil prices ended their dealings, yesterday, Thursday, June 22, with a decline of more than 4%, amid fears of an economic recession that might limit demand.
Oil price analysis
“Recession fears are escalating again after central banks raised interest rates and hawkish Fed statements,” said CMC Markets analyst Tina Ting, adding that a stronger dollar was also affecting oil prices.
The appreciation of the dollar, which rose 0.3% this week, could affect oil demand by making fuel more expensive for holders of other currencies.
Both benchmarks had fallen about $3 in the previous session after the Bank of England raised interest rates by half a percentage point; This raised fears of an economic slowdown affecting fuel demand.
The market is now awaiting the release of purchasing managers’ indices from all over the world, on Friday; To see manufacturing activity and demand trends.
demand for oil
The Energy Information Administration said, on Thursday, that crude oil inventories in the United States recorded a sudden decline last week, supported by strong demand for exports and a decline in imports, however, gasoline and distillate inventories rose.
Federal Reserve Chairman Jerome Powell said that the US central bank will move interest rates at a “careful pace”; Policymakers are heading towards ending their historic round of monetary tightening.
Higher interest rates increase borrowing costs for businesses and consumers; which may slow economic growth and reduce demand for oil; Concerns about hikes by major central banks clouded the outlook for fuel demand for the rest of the year.
“Energy traders are concerned that the Fed and Friends may hamper economic growth in the second half of the year,” said OANDA analyst Edward Moya, according to Reuters.
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