Oil mixed as concerns offset lower stocks

US economic contraction fuels recession fears that could hit energy demand

NEW YORK:

Oil prices were mixed on Thursday, as concerns about a potential global recession that would knock energy demand offset lower crude inventories and a rebound in US gasoline consumption.

Brent crude futures rose 28 cents to $106.90 a barrel by 1716 GMT, after gaining $2.22 on Wednesday.

US West Texas Intermediate crude (WTI) fell 58 cents to $96.68 a barrel, after rising $2.28 in the previous session.

Prices pared gains mid-morning trade after the US Commerce Department reported the world’s biggest economy unexpectedly contracted in the second quarter, fuelling concerns about a recession that could hit energy demand. Consumer spending grew at its slowest pace in two years and business spending declined.

“When we look at recessionary numbers, if it is a slowdown at this point, it’s a minor slowdown,” said Phil Flynn, an analyst at Price Futures group.

“If you look at demand and supply numbers for oil, we’re well below average on supply and demand is holding up better than anticipated.”

Investors focused on US crude inventory numbers from Wednesday that showed oil stockpiles fell by 4.5 million barrels last week, against expectations for a 1 million-barrel drop, while US gasoline demand rebounded by 8.5% week on week.

Published in The Express Tribune, July 29^th, 2022.

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