Oil extends losses on recession worries

Hits 12-week low as investors concerned over energy demand

NEW YORK:

Oil prices slid about 2% to a 12-week low in volatile trade on Wednesday, extending Tuesday’s heavy losses as investors grew more worried energy demand would take a hit in a potential
global recession.

Brent futures for September delivery fell $2.20, or 2.1%, to $100.57 a barrel by 1727 GMT. US West Texas Intermediate (WTI) crude fell $1.54, or 1.6%,
to $97.96.

Both benchmarks were in technically oversold territory for a second straight day, on track for their lowest close since April 11. Trade was volatile, with both benchmarks retreating sharply from early rises of over $2 a barrel on supply concerns. Crude futures have been extremely volatile for months.

On Tuesday, Brent slid 9% and WTI 8%. Brent’s $10.73 drop was the third biggest for the contract since it started trading in 1988. The biggest drop was $16.84 in March. US diesel futures also fell about 5%. Analysts at UBS bank cited “recession fears, the unwinding of the oil trade as inflation hedge, a stronger US dollar, hedge funds reacting to negative oil price momentum, producer hedging, and new mobility restriction concerns in China.”

Published in The Express Tribune, July 7^th, 2022.

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