Oil prices are slightly changing today after a sharp drop on Friday, due to growing market fears that a rapid tightening of policy by the Federal Reserve System (FRS) will trigger a recession in the US economy.
The price of August Brent crude futures on the London ICE Futures exchange by 8:36 Moscow time was $113.05 per barrel, which is $0.07 (0.06%) lower than the closing price of the previous session. Following the results of trading on Friday, these contracts fell by $6.69 (5.6%), to $113.12 per barrel.
The price of WTI oil futures for July at electronic trading on the New York Mercantile Exchange (NYMEX) was $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 value of these contracts decreased by $8.03 (6.8%) to $109.56 per barrel.
At the end of the week, Brent fell by 7.3%, WTI – by 9.2%. Before that, Brent showed a rise for four consecutive weeks, WTI – seven.
“Concerns about the prospects for oil demand are increasing amid growing fears that global economic growth will slow down in the coming months,” City Index analyst and Forex.com Fawad Razaqzada. “There is a possibility that the economic downturn will turn out to be more severe than expected, and this worries investors the most,” the expert quoted Market Watch as saying.
Meanwhile, Vandana Hari, founder of Singapore-based Vanda Insights, notes that despite concerns about the prospects for the global economy, the problem of reducing oil supply on the world market will persist as long as the Russian-Ukrainian conflict continues. This will support the oil market, she believes.
U.S. Energy Secretary Jennifer Granholm said over the weekend that gasoline demand in the country will continue to grow, and the likelihood of high prices remains.
The June forecast of the US Department of Energy suggests that gasoline prices in the country in the third quarter will average $4.27 per gallon. According to Granholm, this forecast may be revised upwards as a result of global events, for example, if Europe stops purchasing Russian oil.
Also, oil supplies from Saudi Arabia to China in May increased by 9% compared to the same month last year. Imports of Russian black gold reached a record high of about 2 million barrels per day, an increase of 55%..