Home » Crude oil closes: New York crude ends eight-week winning streak as demand worries linger

Crude oil closes: New York crude ends eight-week winning streak as demand worries linger

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Original title: Crude oil closes: Demand worries linger, New York crude oil ends eight-week winning streak

Financial circles reported on June 18 that crude oil futures fell sharply on concerns that interest rate hikes by major central banks could slow global economic growth and cut energy demand.

West Texas Intermediate crude for July delivery fell $8.03 to settle at $109.56 a barrel on the New York Mercantile Exchange, down 6.8%. Gold prices based on front-month contracts ended the week down 9.2% after seven straight weeks of gains, according to Dow Jones Market Data. August Brent crude futures fell $6.69 to $113.12 a barrel on ICE Futures Europe, down 5.6%. It fell 7.3% for the week, breaking a four-week winning streak.

Gasoline prices fell 4.1% to $3.793 a gallon in July on the New York Mercantile Exchange, bringing the week to a 9.1% decline. Heating oil for July fell 5.1% to $4.3398 a gallon for a weekly loss of 0.6%. Natural gas for July fell 7% to $6.944/MMBtu, its lowest close since April 28.

Oil prices fell this week as investors fled riskier assets after the U.S. Federal Reserve raised interest rates. Fears that the economy could slip into recession weighed on commodities and other assets considered riskier.

Fawad Razaqzada, market analyst at City Index and FOREX.com, said: “Demand concerns are growing as expectations grow that the global economy will slow in the coming months. The slowdown may be more severe than expected, That’s what worries investors the most.”

Following the Fed’s rate hike, the Swiss National Bank raised rates more than expected and the Bank of England also raised rates.

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Robbie Fraser, manager of global research and analysis at Schneider Electric, said: “While many see sharp rate hikes as the key to containing inflation, the acceleration of rate hikes has also added to pushing the overall economy into recession. risk, as higher interest rates dampen economic growth. In the case of crude oil, this brings demand into focus, especially as consumers face record oil prices at the start of the summer driving season in many cases.”

Fraser said in a daily report that the Biden administration “is increasingly critical of crude producers and refiners as oil prices continue to rise, with recent reports suggesting the U.S. may consider restrictions on products such as diesel and gasoline. export”. However, “Ultimately, lower prices may need to come from the usual fundamentals rather than ad hoc legislation.” Crude oil prices rebounded on Thursday after news of new U.S. sanctions on Iran.

But Saxo Bank strategists noted that investors could not shake off demand concerns. “Additionally, the short-term technical outlook has weakened after several failed attempts to break highs, but the IEA highlighted this earlier this week given the prospect of tight supply,” they said.

The International Energy Agency said earlier this week that supply growth is expected to lag demand growth, tightening an already tight oil market, with prices surging to a shortfall of 500,000 barrels a day. Meanwhile, natural gas futures fell more than 21% this week, the largest weekly percentage drop since early December 2021.

U.S. natural gas prices fell more than 16 percent on Tuesday after a delay in the full resumption of operations at an LNG export facility in Freeport, Texas, which is expected to increase the supply of natural gas stored in the United States.

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Source: Finance WorldReturn to Sohu, see more

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