Oil prices fall on recession fears, on track for third weekly loss

Content of the article

TOKYO — Oil prices fell on Friday, extending the previous day’s plunge, as lingering fears of a recession weighed on sentiment, putting benchmarks on track for their third consecutive weekly losses.

Brent crude futures were down 43 cents, or 0.4%, at $108.60 a barrel at 0653 GMT, giving up earlier gains of more than $1.

WTI crude futures for August delivery slid 60 cents, or 0.6%, to $105.16 a barrel, also giving up an early gain of nearly $1.

Both contracts fell about 3% on Thursday.

Content of the article

« Earlier in the session, the market took a breather after Thursday’s selloff as OPEC+ gave no surprises, saying it would stick to its planned August oil production hikes, » said Tsuyoshi Ueno, senior economist at the NLI Research Institute.

« But uncertainty over OPEC+ policy in September and beyond and fears that the Federal Reserve’s aggressive rate hikes could lead to a US recession and hamper fuel demand dampened sentiment, » a- he declared.

On Thursday, the OPEC+ producer group, including Russia, agreed to stick to its production strategy after two days of meetings. However, the producers’ club avoided discussing politics from September.

Previously, OPEC+ decided to increase production each month by 648,000 barrels per day (bpd) in July and August, compared to a previous plan to add 432,000 bpd per month.

Content of the article

US President Joe Biden will make a three-leg trip to the Middle East in mid-July, which includes a visit to Saudi Arabia, putting energy policy in the spotlight as the US and other countries grapple with soaring fuel prices that drive up inflation.

Biden said on Thursday he would not directly pressure Saudi Arabia to increase oil production to curb soaring prices when he sees the Saudi king and crown prince during a visit this this month.

« All eyes are on whether Saudi Arabia or any other Middle Eastern oil producer would ramp up production to meet US demand, » NLI’s Ueno said.

Elsewhere, 74 Norwegian offshore oil workers at Equinor’s Gudrun, Oseberg South and Oseberg East platforms will go on strike from July 5, the Lederne union said on Thursday, likely halting around 4% of oil production norwegian.

Oil prices are expected to stay above $100 a barrel this year as Europe and other regions struggle to wean themselves off Russian supplies, a Reuters poll showed on Thursday, although economic risks may ease. the rise. (Reporting by Stephanie Kelly and Yuka Obayashi; Editing by Kim Coghill and Jason Neely)