Oil prices decline for the second session and record weekly losses – (Update)

Oil prices decline for the second session and record weekly losses – (Update)

Oil prices fell, at the end of trading today, Friday, June 23 (2023), to continue bleeding losses for the second session in a row, amid fears of a global recession that might limit demand.

Oil markets recorded a weekly decline of about 4%, with a higher-than-expected rate hike in Britain and warnings of looming increases in the United States fueling concerns about demand.

The weekly report of Baker Hughes showed that the number of oil rigs in the United States decreased by 6 during the past week, bringing the total to 546 rigs.

Oil prices today

At the end of the session, Brent crude futures – August 2023 delivery – fell by 0.4%, to record $73.85 a barrel.

West Texas Intermediate crude futures – August 2023 delivery – fell by 0.5% to $69.16 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.

During the week ending today, the price of Brent crude and WTI crude fell by 3.6% and 3.8%, respectively.

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.

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Oil tanks near a port in Japan
Oil tanks near a port in Japan – Photo courtesy of Reuters

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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