Singapore, April 13 (BNA): Oil prices fell on Thursday, after rising for two sessions, as investors continued to worry about a possible US recession and weak demand for oil.
Brent crude fell 20 cents, or 0.2 percent, to $87.13 a barrel by 03:52 GMT, while US West Texas Intermediate crude fell 15 cents, or 0.2 percent, to $83.11.
Both benchmarks rose 2% on Wednesday to their highest levels in more than a month as quiet US inflation data spurred hopes that the Federal Reserve is likely to stop raising interest rates, Reuters reported.
But the previous tightening, which raised interest rates to their highest levels since 2007, raised concerns that the Fed’s focus on stemming inflation could stifle economic growth and future oil demand in the world’s largest oil user.
“Talks about a possible US recession that were highlighted in the minutes of the recent Fed meeting continue to raise doubts about the outlook for oil demand, which has been invalidated by the currently tighter supply conditions,” said Yeap Jun Rong, market analyst at IG.
The US Consumer Price Index (CPI) rose 0.1% last month, less than economists’ expectations for a 0.2% gain, and down from a 0.4% increase in February, raising expectations the Fed is likely to halt interest rate hikes after an increase. Possibly in May. .
On Wednesday, markets shrugged off a slight increase in US crude oil inventories, attributing it in part to a congressional-mandated release of oil from the US emergency reserve and lower exports at the start of the month.
The Energy Information Administration said on Wednesday that crude inventories (USOILC=ECI) rose by 597,000 barrels last week, compared to analysts’ expectations in a Reuters poll for a decrease of 600,000 barrels. Meanwhile, gasoline and distillate inventories fell less than expected.
US Energy Secretary Jennifer Granholm said on Wednesday that the Biden administration plans to refill the US Strategic Petroleum Reserve soon, and hopes to do so at lower oil prices.
However, the oil market was rocked to the upside two weeks ago after the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia agreed to cut production.
As a result, Fatih Birol, Executive Director of the International Energy Agency, said that as a result, the global oil market may experience a scarcity in the second half of 2023, which could push prices higher.
WWA