Crude oil closed lower on Tuesday (May 24) as markets came under pressure from recession fears. The United States also signaled that it could restrict oil exports to control energy prices in the country.
- WTI crude futures were down 52 cents, or 0.5%, at $109.77 a barrel.
- BRENT crude futures were up 14 cents, or 0.1%, at $113.56 a barrel.
WTI crude futures fell after U.S. Energy Secretary Jennifer Granholm told reporters that President Joe Biden had not ruled out the possibility of oil export restrictions to curb rising energy prices in the country.
The United States had previously announced that it would release its strategic reserves (SPR), but oil prices continued to rise. This led to an increase in inflation and affected Biden’s approval rating.
Biden’s approval rating fell to a record low ahead of the November midterm elections, reflecting Americans’ dissatisfaction with the country’s economic situation. As a result, gross domestic product (GDP) contracted 1.4% in 1Q22, contrary to analysts’ expectations of 1.1% growth.
The market was also pressured by news reports that Beijing has tightened its lockdown measures to contain the spread of COVID-19. The increased number of infected people has led investors to fear that Beijing’s municipal government may use the same lockdown measures as Shanghai.
Investors will be keeping an eye on the European Union (EU) summit on May 30-31, which will discuss sanctions against Russian oil.
Investors are also paying attention to crude oil inventories released today by the EIA.
The Spot Market is Open
Wednesday, May 25, 2022