Crude oil prices fell about 1.5% during trading today, Friday, February 17 (2023), amid fears of a global recession that may affect demand.
Oil markets are heading for weekly losses, as strong US economic data increased fears that the Federal Reserve will tighten monetary policy further to counter inflation, a move that could hurt fuel demand even as crude inventories grow.
Crude oil prices today
By 07:30 a.m. GMT (10:30 a.m. Mecca time), benchmark Brent crude futures – for delivery in April 2023 – fell 1.34%, to $84 a barrel.
The price of US West Texas crude futures – delivery in March 2023 – decreased by 1.45%, to $ 77.35 a barrel, according to data viewed by the specialized energy platform.
Crude oil prices ended their trading, yesterday, Thursday, February 16, declining for the third consecutive session, with signs of slowing demand in America.
Economic recession fears
The data showed that the producer price index in the US rose 0.7% in January, after declining by 0.2% in December.
Meanwhile, jobless claims unexpectedly fell to 194,000, compared to the expected 200,000, according to a survey by Reuters.
“The strong US data reinforced concerns about raising interest rates and pushed up US Treasury yields, which affected crude oil and other commodity prices,” said Kazuhiko Saito, senior analyst at Fujitomi Securities Co Ltd.
US oil stocks
CMC Markets analyst Tina Teng said: The rise in US oil inventories to their highest level in 17 months indicates weak demand, which led to a decline in crude oil prices.
“Crude oil prices also fell due to risk-free trades following Wall Street’s sell-off after PPI data and US dollar strength,” Teng added.
Crude oil prices have fluctuated over the past weeks between fears of a recession in the United States amid increases in inflation rates to fight inflation and hopes of increasing demand in China, the world’s largest oil importer.
demand for oil
The International Energy Agency said this week that China will account for nearly half of oil demand growth this year after it eased Corona restrictions, but that production restrictions by OPEC + countries may mean a supply deficit in the second half.
Saudi Energy Minister Prince Abdulaziz bin Salman said that the current OPEC+ agreement to cut oil production targets by 2 million barrels per day will remain until the end of the year, adding that he remains cautious about Chinese demand.
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