“Oil prices continue sharp decline after unexpected inventory data release”

Investing.com – Data has now been released to record a decline of more than 1.2 million barrels, while expectations were hovering around a decline of only 1.1 million barrels.

The US Energy Administration’s information data revealed a decline in oil inventories by 1.280 million barrels, compared to expectations for a decrease of 1.100 million barrels, while it recorded a decline in the week before last by 5.054 million barrels.

And the two benchmarks closed yesterday at their lowest levels since March 24, in which they also recorded the largest percentage drop in one day since early January.

Meanwhile, it extended its strong losses on Wednesday after dropping 5% in the previous session, now losing nearly a new 4% today to the total now 9% in a few hours, as investors fretted about the health of the US economy ahead of the Fed’s expected hike. Fed later in the day.

It fell by 3.8% to 72.5 per barrel.

While Texas crude fell by 3.95% to $68.85 a barrel.

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“The Fed is expected to raise rates again by a quarter point later today as part of its long-term fight against inflation,” said Stephen Brennock, an analyst at PVM Oil.

He added that concerns about the health of the US banking sector and downbeat US jobs data “did nothing to dispel fears that the US economy is heading towards a shallow recession.”

Further interest rate increases could slow economic growth and affect energy demand.

Energy prices are also under pressure after data from China over the weekend showed that manufacturing activity fell unexpectedly in April. As China is the largest consumer of energy in the world and the largest buyer of crude oil.

The International Monetary Fund said the post-pandemic reopening of China’s economy will be pivotal for Asia, as it raised its economic outlook for the region on Tuesday. But she warned of the risks of persistent inflation and global market volatility driven by the problems of the Western banking sector.

And Morgan Stanley (NYSE:) cut its forecast for Brent prices to $75 per barrel by the end of the year.

The bank said in a note, referring to the booming exports from Russia despite the Western sanctions: “The Russian supply was not affected by the sanctions, along with the negative expectations about the return of the recovery of Chinese demand,” which supports the decline in prices.

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