© Reuters. Strong losses for crude oil prices at the end of the week, why?
Arabictrader.com – Prices fell strongly during trading today, Friday, in conjunction with renewed concerns in the markets about the increase in oil supply in the markets, in addition to the possibility of continuing to tighten monetary policy at a strong pace during the upcoming Federal Reserve meetings to control high inflation.
During today’s trading, US crude spot contracts fell by 2.64%, to record $75.97 a barrel. At the same time, Brent crude futures fell by 2.42%, to record $82.58 a barrel.
The price of crude oil fell at the end of the week in light of the strengthening of market concerns about the continuation of the US Federal Reserve in its strong tightening approach during the next March meeting, and it may raise interest by about 50 basis points in an attempt to control high inflation, and this may push the US economy towards recession and reduce US demand. on crude oil.
In this regard, Federal Member Loretta Mester stated that there is a convincing case for raising interest rates by 50 basis points at the next meeting of monetary policy during next March, especially since bullish inflation risks still exist, and therefore the inflation data for the month of January showed that it must The US Federal Reserve will do more to curb inflation. Also, a member of the US Federal Reserve, Bullard, said yesterday evening, Thursday, that inflation is still very high and the bank’s moves towards reducing high inflation in the United States will continue, along with additional increases in interest rates, and these statements boosted demand for the US and had a negative impact on oil prices. .
At the same time, the expectations of the major banks for crude oil prices during the current year had negative repercussions on the levels of crude oil prices, as JP Morgan (NYSE:) analysts said in a research note, today, Friday, that it is unlikely that prices will exceed the $ $100 a barrel this year, unless major geopolitical developments occur.
Experts at the bank indicated that it is unlikely that the OPEC Plus alliance will defend the level of $80 a barrel, and therefore it will not need to reduce oil production quotas this year, and the alliance may instead add 400 thousand barrels per day to production, and also, it is expected that Russian production will witness a recovery. Completed by June, and that high price levels prevent the United States from buying back to enhance its strategic petroleum reserves, and thus the gap between the supply and demand balance may shrink, and these new expectations had negative repercussions on crude oil prices.
Also, oil prices were affected in light of concerns about the abundance of oil supply in the markets, especially after Libya talked about its intention to increase oil production levels during the coming period, as the head of the National Oil Corporation in Libya, Farhat bin Qadara, revealed, during a press statement, his country’s intention to develop a new strategic plan. It aims to raise the country’s oil production during the coming period, and that this plan will aim to increase production levels to 2 million barrels per day.
With regard to other energy sources, gasoline contracts decreased during the day’s trading, by 3.15%, to record $2.3604 per gallon. While, contracts decreased and recorded 2.350 dollars per million thermal units. Also, contracts fell by 3.37%, and recorded around $2.7199.
