Sign Up for FREE Daily Energy News
Canadian Flag CDN NEWS  |  US Flag US NEWS  | TIMELY. FOCUSED. RELEVANT. FREE
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2
BREAKING NEWS:

Hazloc Heaters
Vista Projects
Copper Tip Energy Services
Vista Projects
Hazloc Heaters
Copper Tip Energy


Oil Set for Weekly Loss as Recession Concerns Wound Commodities


English Español 简体中文 हिन्दी Português
These translations are done via Google Translate
(Bloomberg) Oil headed for its first back-to-back weekly loss since early April as fears of a demand-sapping global recession and tighter US monetary policy ripped through commodity markets to spur a broad sell-off.

West Texas Intermediate traded near $105 a barrel after retreating over the previous two sessions. The US benchmark has lost almost 4% this week, putting prices on course for their first monthly drop since November.

In a highly volatile price environment this week, the oil market has been sending mixed signals.

A slump in headline prices has reflected concerns about a looming global recession. But timespreads — which are a proxy for how tight real world supplies are — have surged higher amid a renewed supply hit in Libya. Meanwhile refined product prices have also stayed high in the selloff.

Oil benchmarks slump with commodities on recession concerns

Oil’s rally went into reverse earlier this month on escalating concern over a global slowdown as central banks, including the Federal Reserve boosted interest rates to quell raging inflation. Prices have sunk despite signs that energy markets remain tight in the near term as the war in Ukraine drags on and supply risks persist. In addition, key time spreads remain elevated.

GLJ

“The threat of recession-induced demand destruction looms large,” said Stephen Brennock an analyst at brokerage PVM Oil Associates. “That being said, the consensus remains that the oil market will see high demand and tight supply over the summer months.”

GLJ
Prices:
  • WTI for August delivery rose 1.4% to $105.71 a barrel at 10:23 a.m. in London.
  • Brent for August settlement added 1.3% to $111.43 a barrel.

In a sign of the current tightness, oil market backwardation, a bullish pattern in which near-term prices trade above longer-dated ones. Brent’s prompt spread — the difference between its two nearest contracts — was $3.81 a barrel, up from $2.73 a week ago.

Read also: Demand for Crude Still Strong Despite Recession Fears

That in part reflects still-strong demand for real-world barrels. Cargoes for Asian buyers are fetching giant premiums to their benchmarks for August loading, signaling confidence in demand over the next few months.



Share This:



More News Articles


GET ENERGYNOW’S DAILY EMAIL FOR FREE