Business News Asia
On Wednesday (Jan. 18), crude oil futures closed lower as investors were worried about the potential of a US recession, which overshadowed the positive outlook of increased oil demand from China’s economic opening.
- WTI crude futures were down 70 cents, or 0.9%, at $79.48 a barrel.
- BRENT crude futures were down 94 cents, or 1.1%, at $84.98 a barrel.
Initially, crude oil futures rose on hopes that China’s economic opening would boost its economy and oil demand. Additionally, crude oil contracts were supported by expectations that Western countries’ oil price ceiling on Russia would reduce the global oil supply. However, the crude oil contract later fell as investors worried about a potential recession in the US.
According to the US Department of Commerce, retail sales fell 1.1% in December, worse than the 0.8% decline expected by analysts. This was largely due to declining auto sales and the drop in gasoline prices, which affected sales at gas stations. The US Department of Labor also revealed that the Producer Price Index (PPI), which measures inflation on producer spending, rose 6.2% in December from a year earlier, below analysts’ expectations of 6.8%.
In addition, the Federal Reserve announced that overall US industrial production fell 0.7% in December, following a 0.6% drop in November. Markets were also under pressure from the St. Louis Fed and Cleveland Fed presidents, who both advocated for the Fed to raise interest rates above 5% to bring inflation back to target.
Investors are now waiting for the weekly US crude oil figures, with the US Energy Information Administration set to release the data today.
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Thursday, January 18, 2023