Oil prices pull back on China COVID worries, recession fears

Rate this post

Oil futures fell on Monday, pressured as Beijing moved to contain a further rise in COVID-19 cases, and global stocks fell as shockwaves read the price index. US consumption, which was warmer than expected, continued to affect financial markets.

Price action
  • West Texas Intermediate Crude for July Delivery CL.1,


    it fell $ 1.89, or 1.6%, to $ 118.78 a barrel on the New York Stock Exchange.

  • August Brent crude BRN00,

    the world benchmark index fell $ 1.64, or 1.3%, to $ 120.33 a barrel on ICE Futures Europe. WTI and Brent hit a three-month high last week.

  • Back to Nymex, July gasoline RBN22,
    it fell 2.2% to $ 4.0821 a gallon, continuing a decline from last week’s all-time highs, while HON22 oil warmed in July.
    it fell 0.8% to $ 4.3297 a gallon.

  • Natural gas futures for July NGN22,
    down 2.5% to $ 8.63 per million British thermal units.

Market drivers

Beijing has moved to increase testing after a COVID-19 outbreak linked to a nightclub. The outbreak has infected at least 183 people in 15 districts, according to news reports.

“The hope that oil demand will return to normal quickly and completely after the lifting of the previous blockades on China, the world’s second largest consumer of oil, has been premature,” said Carsten Fritsch. Commerzbank commodity analyst, in a note.

US equities, meanwhile, were well on their way to another session of strong losses, as global equities continued to rise following a reading of Friday’s consumer price index that showed inflation reached its 40-year high of 8.6% year-on-year in May. .

“If the Fed raises interest rates considerably stronger in response and the US economy falls into recession, that would also affect oil demand in the world’s most oil-consuming country,” Fritsch said. who noted the concern that the plans outlined by the EU. The Central Bank began raising rates last week has sparked fears of recession for the eurozone.

A further rise in the US dollar in expectations that the US Federal Reserve will intensify its aggressive monetary tightening efforts was also a drawback for crude and other unit-priced commodities. A stronger dollar makes them more expensive for users of other currencies.

ICE US Dollar DXY Index
+ 0.67%,
a measure of the currency against a basket of six main rivals, rose 0.6%.

Source link

Leave a Comment