Oil prices continued to slide on Thursday, falling more than 2% as investors recalibrated assessments of recession risks and fuel demand amid rising interest rates in major economies.
U.S. West Texas Intermediate (WTI) crude futures had slipped $2.6, or 2.7%, to $103.46 a barrel. Brent crude futures fell $2.5, or 2.3%, to $109.22 a barrel.
Both benchmarks fell $3 a barrel in early morning Asian trading, after plunging about 3% in the previous session. They are at their lowest levels since mid-May.
Investors continue to assess how concerned they should be that central banks could drag the global economy into recession as they attempt to rein in inflation by raising interest rates.
“Oil markets remained under pressure as investors feared U.S. rate hikes would stall the economic recovery and dampen demand for fuel,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.
“U.S. and European hedge funds sold their positions before the end of the second quarter, which is also dampening investor sentiment,” he said, predicting that WTI could fall below $100 a barrel ahead of the lows. 4th of July holiday in the United States. .
US Federal Reserve chief Jerome Powell said on Wednesday the central bank was not trying to engineer a recession to stop inflation, but was fully committed to bringing prices under control, even if it risked causing a slowdown. economic.
Analysts at Haitong Futures wrote: “With more data proving that Russian crude supply is less affected by sanctions than most people previously estimated, supply could see a larger increase than expected. short term.”
President Vladimir Putin said on Wednesday that Russia was redirecting its oil trade and exports to countries in the BRICS group of emerging economies following Western sanctions against Ukraine.
China’s crude oil imports from Russia in May were up 55% from a year earlier and at a record high.
US President Joe Biden, meanwhile, has called on Congress to pass a three-month suspension of the federal gasoline tax to help tackle record pump prices and provide temporary relief to American families this summer. .
“The news temporarily pushed up prices for petroleum products, but it was later estimated that even if the gas tax was suspended, retail prices would remain high, making it difficult to stimulate demand,” Fujitomi’s Saito said.
The US Energy Information Administration said its weekly oil data, which was due for release on Thursday, will be delayed due to system issues until at least next week.