Crude oil closes in the red on the back of demand worries

Crude oil futures closed lower on Monday (Aug. 22) as investors worried about the impact of accelerated interest rate hikes by the Federal Reserve. However, crude futures received some intraday support after Saudi Arabia signaled it was ready to cut production to meet market challenges.

  • WTI crude futures were down 54 cents, or 0.6%, at $90.23 a barrel.
  • BRENT crude futures were down 24 cents, or 0.25%, at $96.48 a barrel.

Initially, WTI and Brent crude oil futures fell sharply as investors feared that the Fed might raise interest rates for a third time by 0.75% at its September meeting. This could lead to a deeper recession in the U.S. economy and a slowdown in oil demand.

The market was also pressured by concerns about a slowdown in the Chinese economy. This is partly due to the energy shortage in the northwest of the country.

Chinese Premier Li Keqiang acknowledged that China is in an extremely difficult situation to stabilize its economy.

However, the market subsequently narrowed its negative range after the Saudi energy minister stated that OPEC and OPEC+ have the determination, flexibility, and approach to meet the challenge of a global economic downturn. This includes curbing oil production at any time and in different ways.

OPEC and its allies will sign a new agreement that builds on past experience and success.

The Spot Market is Open

Tuesday, August 22, 2022

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
10.35

91.08

+0.72

+0.80%

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