Business News Asia
Oil prices fell on Monday. As a result, the support and loss line continued on concerns that the U.S. interest rate hike could weaken oil demand.
- Brent crude futures were down $1.19, or 1.2%, to $102.01 a barrel.
- WTI crude futures were down $1.33, or 1.4%, to $93.37 a barrel.
“Oil prices have been under pressure due to growing worries that aggressive rate rises by the U.S. Federal Reserve will slow the global economy and reduce fuel demand,” said Tetsu Emori, chief executive of Emori Fund Management Inc.
“Slack recovery in the Chinese economy is also weighing on market sentiment,” he added.
Oil prices have fluctuated sharply in recent weeks as investors are concerned about further interest rate hikes. This could limit economic activity and reduce fuel demand. This contrasts with tight supply due to disruptions in Russian barrel trade as a result of Western sanctions related to the conflict in Ukraine.
Fed officials said the central bank is likely to raise rates another 75 basis points at its July 26-27 meeting.
China is the world’s second-largest economy narrowly missed contracting in Q2, growing just 0.4% year-over-year, impacted by the COVID-19 lockdown, a weak real estate sector, and cautious consumer sentiment.
On the supply side, Libya’s National Oil Company (NOC) aims to restore production to 1.2 million barrels per day in two weeks.
The European Union said last week it would allow Russian state-owned companies to supply oil to third countries under sanctions adjustments agreed to by member states last week to limit risks to global energy security.
However, the governor of the Russian Central Bank, Elvira Nabiullina, said on Friday that Russia would not supply oil to countries that set their own oil prices.
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Monday, July 25, 2022