Oil headed for its third-week decline, which caused the longest losses this year, fearing that a potential recession would reduce energy demand.
West Texas Intermediate has surpassed $ 106 a barrel after falling due to a plunge in commodities on Thursday. Despite signs that the physical oil market remains very tight, US benchmarks have fallen about 1 percent this week.
This week’s data show the weakness of US consumer spending, which is the largest contributor to GDP. This follows the Federal Reserve’s pivot earlier this year to aggressively tighten monetary policy to curb violent inflation.
Oil fell about 8% in June as investors eroded a rally that spurred a crisis in Ukraine, a disruption in supply and increased demand, fearing a potential global slowdown. Soaring prices surprised President Joe Biden, who is leading efforts to increase crude oil production for Middle Eastern producers.
OPEC and its allies have ratified the increase in oil production this week and have completed the return of supplies that were suspended during the pandemic. A record number of drivers are expected to hit the road this weekend for Independence Day trips as a sign that US demand has been strong so far. After hitting a record of over $ 5 per gallon in June, average retail gasoline prices have fallen slightly over the past few weeks.
Oil time spreads, where traders track signs of strong demand, continue to flash positive signals. Brent’s quick spread (the difference between the two closest contracts) was $ 3.48 a barrel in Backwardation, up from $ 2.73 a month ago.
https://gulfbusiness.com/oil-heads-for-worst-run-of-losses-this-year-on-recession-concern/ Oil heads for worst losses due to concerns about recession this year