EnergyWatch

Oil prices drop to lowest level since beginning of Ukraine war

The shift to a tighter monetary policy among central banks across the world has stoked concerns among investors of slowing economic growth. And that will affect oil demand, which is set to decrease.

Photo: Nick Oxford/Reuters/Ritzau Scanpix

Fears of a global recession put pressure on oil prices. Friday morning, the price of a barrel of crude is at its lowest level since Russia’s invasion of Ukraine.

”It’s a combination of the inventory data and a bit of worries about demand. Because the market is worried about growth more than inflation – even though inflation is still a major issue – the oil price has come down,” says chief investment officer of BNP Paribas Wealth Management Prashant Bhayani to Reuters.

A barrel of European reference crude Brent costs USD 94.37 Friday morning against USD 94.64 Thursday afternoon. US counterpart West Texas Intermediate trade concurrently at USD 88.95 against USD 89.06 Thursday afternoon.

”The market is still struggling on the back of a deteriorating demand picture in the US, with pressure on its refining capacity easing considerably,” says managing partner at SPI Asset Management Stephen Innes to Bloomberg News.

The shift to a tighter monetary policy among central banks across the world has stoked concerns among investors of slowing economic growth. And that will affect oil demand, which is set to decrease. Thursday, the Bank of England warned of an impending recession in the UK while hiking the interest rate by 50 basis points.

Wednesday brought disappointing news as well with the Organization of Petroleum Exporting Countries and allies in OPEC+ announcing that output would be raised by 100,000 barrels of crude per day, which is viewed as a trifling increase that corresponds to 86 seconds of global oil consumption, writes Reuters.

Elsewhere in commodities, a troy ounce of gold goes for USD 1,791.17 Friday morning against USD 1.785.86 Thursday afternoon.

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