Oil prices fell for a second day Monday on fears that fuel demand will decline due to the expected global recession.
- Brent crude futures fell 54 cents, or 0.63%, to $85.61 a barrel.
- WT crude futures fell 48 cents, or 0.61%, to $78.26.
Both contracts fell by around 5% on Friday to their lowest level since January.
The dollar index climbed to a 20-year high Monday against a basket of major currencies. A stronger dollar is likely to reduce demand for dollar-denominated oil, as buyers using other currencies will have to spend more to buy crude.
However, oil prices are supported by the Russian-Ukrainian war and the EU sanctions on crude oil, which begin in December.
Russell Hardy, chief executive of energy trader Vitol, said fuel supplies have been affected by Russian oil products flowing to Asia and the Middle East instead of Europe.
Hardy also said at an oil conference in Singapore that more than a million barrels a day of U.S. crude oil will be shipped to Europe to fill a gap in Russian supply.
At the same meeting, Colombian state energy company Ecopetrol said it had sold more oil to Europe, displacing Russian supplies, while competition for market share in Asia had increased.
Attention turned to what OPEC and OPEC+ might do at their Oct. 5 meeting after agreeing to modest production cuts at their last meeting. However, with OPEC+ yields below target, the announced cuts are unlikely to have much impact on supply.
Last week’s data showed that OPEC+ missed its target of 3.58 million barrels per day in August, which is less than in July.
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Monday, September 26, 2022