Oil prices are little changed after a sharp drop on Friday

Oil is little changed today after a sharp drop on Friday, driven by growing market concerns that rapid policy tightening by the Federal Reserve (Fed) will trigger a recession in the US economy.

The cost of August futures for Brent crude oil on the London-based ICE Futures exchange by 8:36 Moscow time was $113.05 per barrel, down $0.07 (0.06%) from the previous session’s closing price. At the end of trading on Friday, these contracts fell in price by $6.69 (5.6%), to $113.12 per barrel.

The price of WTI oil futures for July at the electronic trading of the New York Mercantile Exchange (NYMEX) amounted to $109.6 per barrel by 8:31 Moscow time, which is $0.04 (0.04%) higher than the final value of the previous session. On Friday, the cost of these contracts decreased by $8.03 (6.8%) to $109.56 per barrel.

At the end of the week, Brent fell in price by 7.3%, WTI – by 9.2%. Prior to that, Brent had shown a rise at the end of four consecutive weeks, WTI – seven.

“Concerns about the outlook for oil demand are rising amid growing fears that global economic growth will slow in the coming months,” said Fawad Razaqzada, analyst at City Index and Forex.com. “There is a possibility that the economic slowdown will be more severe than expected, and this worries investors the most,” Market Watch quoted the expert as saying.

Meanwhile, Vandana Hari, founder of Singapore-based Vanda Insights, notes that despite concerns about the outlook for the global economy, the problem of declining oil supply in the global market will persist as long as the Russia-Ukraine conflict continues. This will support the oil market, she believes.

U.S. Energy Secretary Jennifer Granholm said over the weekend that demand for gasoline in the country will continue to grow, and the likelihood of continued high prices remains.

The U.S. Department of Energy’s June forecast calls for gasoline prices in the country to average $4.27 per gallon in the third quarter. According to Granholm, this forecast could be revised upward as a result of world events, for example, if Europe stops buying Russian oil.

 


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