Demand concerns bring down oil prices further

22 Jul 2022 , 08:26 AM

On Thursday, oil prices decreased by more than $5 as rising gasoline inventories in the United States and an increase in the European Central Bank’s interest rate fueled concerns about supply and demand, respectively.

Brent crude futures had dropped $3.88, or 3.6%, to $103.04 per barrel after falling 0.4% the previous session. After falling by 1.9% on Wednesday, U.S. West Texas Intermediate oil futures were down $3.79, or 3.8%, at $96.09.
Both had earlier in the session lost more than $5.

Trading volumes in oil futures have been small, and prices have fluctuated as traders attempt to balance decreased energy demand with tighter supply as a result of the loss of Russian barrels following the nation’s invasion of Ukraine.

The European Central Bank increased interest rates on Thursday in line with many other central banks, putting less emphasis on the economy’s slump, which could affect oil consumption and more on taming runaway inflation.

In the meantime, the Bank of Japan kept interest rates at historically low levels in an effort to revive the economy.

Government data revealed on Wednesday that the United States gasoline stocks increased by 3.5 million barrels last week, considerably above analyst expectations.

Libya’s National Oil Corp (NOC) reported on Wednesday that after the force majeure on oil exports was lifted last week, crude production had resumed at a number of oilfields.

On the natural gas front, Gazprom resumed flows through the Nord Stream 1 pipeline, which provides the European Union with more than one-third of Russia’s total gas exports.

However, the Keystone pipeline, one of Canada’s main oil export routes, continued to run at lower rates on Wednesday, according to its operator, TC Energy.