Brent ended with a loss of 0.63% at 103.20 dollars and WTI ended with a depreciation of almost 2% at 94.70 dollars.
Oil prices fell slightly on Friday for the third session in a row, between fears of an economic slowdown, accentuated by central banks’ attempts to curb inflation, and concerns regarding demand.
A barrel of Brent from the North Sea for delivery in September fell 0.63% to 103.20 dollars.
The barrel of American West Texas Intermediate (WTI) for delivery the same month fell 1.71% to 94.70 dollars.
“The market is very concerned that a slowdown in demand is taking place, given the latest data on US inventories showing that demand for fuels is starting to react to higher prices,” said Bart Melek of TD Securities.
On Wednesday, the U.S. Energy Information Agency (EIA) reported an unexpected rise in gasoline reserves, which rose by 3.5 million barrels, reflecting lower fuel consumption, unusual during the travel-friendly summer season.
“The market also thinks that the tension on supply may not be as great as feared and speculation on long positions is starting to unwind,” added the analyst.
In addition, disappointing economic indicators have revived fears of recession, which have weighed on oil prices for several weeks.
Economic activity in the euro zone in particular contracted in July in the private sector, down for the first time since February 2021, under the effect of still high inflation, according to the composite PMI index published on Friday by S&P. Overall.
“Continued rate hikes by central banks around the world (…) should also accelerate the erosion of demand,” said Han Tan, an analyst at Exinity.
The European Central Bank (ECB) decided on Thursday to raise interest rates for the first time in more than a decade, surprising with a bigger-than-expected hike to fight inflation.
But the trade-off between fighting rising prices and fears of recession remains complex, as rate hikes might be to the detriment of economic growth, which would ultimately weigh on demand for crude.
Demand from China, a major oil-consuming country, is also of concern due to lockdowns linked to the “zero Covid” policy.
“Despite this bleak outlook, Brent prices are holding around the psychological threshold of $100 a barrel, with still tight market conditions expected to limit oil’s decline in the short term,” Han Tan said.