2023-07-06 15:16:14
Oil prices fell amid demand concerns
Oil prices fell, during Thursday’s trading, following the market realized that an increase in US interest rates will likely fuel fears of a global economic slowdown in light of the scarce supply of crude oil.
The market expects interest rates to be raised in the United States and Europe once more to control runaway inflation, while recent surveys showing slowing factory and service activity in China and Europe fueled fears of a global recession.
The minutes of the Federal Reserve meeting (the US central bank) for the month of June issued yesterday, Wednesday, showed that all members of the bank agreed to keep interest rates unchanged to buy time and assess the need to raise interest once more, although most of the attendees expected that they would eventually have to. To further tighten monetary policy.
The ADP data also fueled fears of raising US interest rates following it showed the strength of the US labor market, as US companies added 497,000 jobs, the largest increase since July 2022.
On the supply side, Saudi Arabia and Russia announced new cuts in their oil production in August. The total production cuts now amount to more than five million barrels per day, the equivalent of five percent of global oil production.
Ministers of the Organization of the Petroleum Exporting Countries (OPEC) and executives from oil companies told a two-day conference in Vienna that governments should shift their attention from supply to demand.
price move
By 1457 GMT, Brent crude futures were down 1.7% at $75.30 a barrel, following rising 0.5% to settle the previous day.
US West Texas Intermediate crude fell 1.8% to $70.53 a barrel, following closing 2.9% higher on Wednesday in post-holiday trading, catching up with gains made by Brent earlier in the week.
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