June 5, 2023

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Oil prices are volatile as the market recession balances fears amid tight supply

Oil prices are volatile as the market recession balances fears amid tight supply

Hesitated Oil prices During trading at the start of the week, after reaching early trading gains today, Monday, investors are assessing the possibility of rising demand in the future amid fears that austerity in the United States could lead to a recession.

Brent crude for August delivery was down 0.15%, or 15 cents, to $ 112.97 a barrel.

In contrast, US crude futures for July delivery were up 0.16%, or 17 cents, to $ 109.73 a barrel, given that today is the official holiday for US markets.

And US Energy Secretary Jennifer Granholm, in an interview with CNN last weekend, warned drivers in the United States that petrol prices could continue to rise.

“We know it’s going to be a tough summer because the driving season has just begun and we know there will be a steady rise in demand,” he said.

Vandana Hari, founder of the analytical firm Vanda Insights, said for her part that supply concerns would push up oil prices, despite economic fears affecting broader financial markets since the US Federal Reserve raised interest rates. As the “Bloomberg” quotes, the war continues in Ukraine.

Commenting on the performance of the oil markets, oil expert Mohammed al-Shatti said China’s ability to absorb Russian oil would be controlled by two things.

He said China and India would benefit from more than $ 30 price cuts when buying Russian oil, as well as the Ukrainian war and the transfer of Russian oil to India, China and Asia in general.

He pointed out that Russian oil is close to the Gulf oil and these countries will be at the expense of their exports, refineries require more oil, so the extraction of more Russian oil depends on increased storage and demand.

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“Demand for this specialty has grown significantly as a result of recent corporate scandals.

Al-Shati explained that the recession is reducing demand and that it could start in the second half of the year or in the first quarter of next year, at which time oil prices could fall below $ 100.