Global Crude Oil news: Worries of a recession in the US puts pressure on oil prices

4 Nov 2022 , 09:18 AM

Early Friday trading saw a decline in oil prices, adding to losses from the previous day due to concerns that U.S. interest rates will rise more than initially anticipated and new worries that COVID outbreaks could reduce China’s need for gasoline.

After sliding 1.5% the previous session, the price of Brent crude futures decreased by 22 cents, or 0.2%, to $94.45 a barrel. The contract was projected to lose more than 1% of its value for the week.

West Texas Intermediate (WTI) crude futures for the United States decreased by 27 cents, or 0.3%, to $87.90 a barrel, compounding a 2% drop from the previous session but still on track to finish the week flat.

As the world’s largest user of oil, worries about a recession in the United States increased on Thursday after Federal Reserve Chairman Jerome Powell said it was “extremely early” to consider stopping interest rate hikes.

The Bank of England issued a warning on Thursday, saying that it believes Britain has entered a recession and that the country’s economy may not grow for another two years.

China maintained its severe COVID-19 curbs despite cases reaching their highest level since August on Thursday, further deteriorating the outlook. Investors believed earlier in the week that the biggest oil importer in the world would be moving toward relaxing limits to help the economy.

Saudi Arabia reduced its December official selling prices (OSPs) for its premium Arab Light crude to Asia by 40 cents to a premium of $5.45 per barrel over the Oman/Dubai average due to weaker demand in China.

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