Sign Up for FREE Daily Energy News
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2

Copper Tip Energy Services
Copper Tip Energy

Oil Extends Losses Near $119 as Global Market Selloff Deepens

These translations are done via Google Translate
Oil extended losses for a third session as investors weighed the prospect of further monetary tightening to combat surging US inflation and the potential for more virus lockdowns in China.

West Texas Intermediate futures fell about 2% to trade near $119 a barrel amid a broader market selloff. US inflation accelerated to a fresh 40-year high last month and traders are now betting the Federal Reserve will raise rates by three quarters of a percentage point at least once in its next three meetings. China is starting to re-impose virus curbs as cases rise, just weeks after major easing in key cities such as Shanghai.

US inflation and China's virus outbreaks weigh on prices

Oil is still up almost 60% this year as rebounding economic demand coincided with a tightening market following Russia’s invasion of Ukraine. The war has fanned inflation, driving up the cost of everything from food to fuels and some analysts are calling it the most bullish market they’ve ever seen. For now though, those drivers are taking a back seat as traders anticipate a sharp hiking of interest rates by the Federal Reserve.


“This week will be one of those weeks when oil fundamentals take a backstep as the global selloff continues to dominate the headlines,” said Keshav Lohiya, founder of consultancy Oilytics, adding that US inflation data “continues to spook the macro markets.”

  • WTI for July delivery dropped 1.7% to $118.60 a barrel at 9:54 a.m. in London.
    • Futures rose 1.5% last week.
  • Brent for August settlement lost 1.6% to $120.09 a barrel.

Goldman Sachs Group Inc. reiterated on Friday that energy prices need to climb further for Americans to start cutting consumption. Consumer resilience is “still sufficient to absorb the higher prices at the pump,” Damien Courvalin, a senior commodity strategist at the bank, said on Bloomberg Television. US retail gasoline prices have repeatedly broken records and recently hit $5 a gallon.

The US has repeatedly asked OPEC to pump more crude to help tame rising gasoline prices and the hottest inflation in decades. President Joe Biden said on Saturday that he hasn’t yet made a decision about visiting Saudi Arabia, but that if he went it would be to take part in meetings that go beyond energy topics. A visit would reflect a shift in diplomatic priorities.

Beijing said a Covid-19 outbreak linked to a popular bar is proving more difficult to control than previous clusters, in a weekend that saw mass testing and rising infections both in the city and Shanghai. Authorities also delayed the reopening for most schools in the capital planned for Monday, while most districts in Shanghai suspended dine-in services at restaurants.

Share This:

More News Articles