fbpx

FEARS OF AN ECONOMIC DOWNTURN CAUSING OIL PRICES TO DECLINE

Harvest Global Markets :

Tuesday saw a little decline in oil prices because of worries about an economic slowdown and weaker gasoline consumption from China, which is still adhering to its strict zero-COVID policy. Brent crude futures fell 41 cents, or 0.45%, to $91.21 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 41 cents, or 0.48%, to $85.05.

WTI had risen earlier by more than $1 a barrel on a weaker dollar, which makes oil cheaper for buyers holding other currencies. But Later in the day, the U.S. dollar index, which compares the greenback to six other currencies increased, which affected oil prices in early European trade.

Also in focus was the Bank of England’s plan to start selling the vast government bond holdings it amassed during the coronavirus crisis. That sent long-dated yields higher, indicating increased risks to financial stability.

Meanwhile, China’s fuel demand outlook weighed on sentiment after the world’s top crude oil importer delayed release of economic indicators originally scheduled to be published on Tuesday.

China’s adherence to its zero-COVID policy has continued to increase uncertainties about the country’s economic growth, Teng said.

On the supply side, U.S. crude oil stocks were expected to have risen for a second consecutive week and are estimated to have increased by 1.6 million barrels in the week to Oct. 14, a preliminary Reuters poll showed on Monday.

Output in the Permian Basin of Texas and New Mexico, the biggest U.S. shale oil basin, is forecast to rise by about 50,000 barrels per day (bpd) to a record 5.453 million bpd this month.

Share this post