Oil Futures Settle Sharply Lower On Demand Concerns
Crude oil prices tumbled on Thursday, extending losses from the previous session, amid concerns about the outlook for energy demand in the near term due to slowing economic growth and rising interest rates.
Fresh Covid-related curbs in several areas in China raised concerns about energy demand in the world’s second largest economy.
Higher gasoline stockpiles in the U.S. and lower demand during the peak summer driving season also weighed on oil prices. Data showed U.S. gasoline stockpiles rose by 3.5 million barrels last week versus expectations for a rise of 71,000 barrels.
Increased supply from Libya and the resumption of Russia’s gas flows to Europe eased supply concerns.
West Texas Intermediate Crude oil futures for September ended lower by $3.53 or about 3.5% at $96.35 a barrel, the lowest settlement since July 14.
Brent crude futures were down $2.91 or 2.7% at $104.01 a barrel a little while ago.
The European Central Bank today raised interest rates by a bigger than expected 50 basis points and unveiled an anti-fragmentation tool called the Transmission Protection Instrument, or TPI.
ECB President Christine Lagarde had said in June that the bank would hike interest rates by 25 basis points in July and follow up with a similar, or bigger, move in September if the macroeconomic outlook deteriorated.
Meanwhile, flows through Russia’s Nord Stream 1 natural gas pipeline partially resumed after being shut for maintenance on July 11. The pipeline had already run on reduced volumes following a dispute sparked by Russia’s invasion of Ukraine.
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