Oil prices soared on Friday as the dollar lost some momentum, although gains remained limited on concerns over a recession and COVID-19 weighing on fuel demand in leading importer China.
Global benchmark Brent crude futures edged higher by 2.2% to $96.84 per barrel, while the US benchmark West Texas Intermediate (WTI) surged by 2.1% to $90.38 per barrel.
The two contracts posted losses earlier in the session as the dollar rose but later eased, with the dollar index falling 0.3% to $112.37.
While demand concerns are pressuring the market, analysts stated that a tight supply is still expected, curbing oil prices, with European sanctions on Russian oil set to take effect on December 5 and a draw in US inventories.
Oil Demand Outlook Remains Weak
The potential for a recession in major oil consumer, the US, grew stronger after Federal Reserve Chairman Jerome Powell said it was too early to consider putting interest rate hikes on hold. That suggested more rate hikes coming, weakening the possibility of higher demand.
Further dimming the outlook, the Bank of England (BoE) warned on Thursday that it believed the UK is already facing a recession, expecting no economic growth in Britain for another two years.
Analysts indicated signs of faltering demand in Europe and the US, with people driving less frequently and Amazon.com Inc. providing a weak sales forecast for the holiday, which may hit demand for distillate for its deliveries.
Highlighting demand woes, Saudi Arabia cut official selling prices (OSPs) for the Arab Light grade to Asia by $0.40 to a premium of $5.45 per barrel, compared to the Oman/Dubai average.
The reduction aligned with estimates from trade sources, which were derived from a gloomier outlook for Chinese fuel demand.
China maintained its strict zero-COVID policy as cases in the country climbed above 2,500 to their highest level since August. Investors had previously expected the world’s top crude importer to lift some of its measures to improve the economy.
On Monday, Microsoft Corp.'s shares soared following the launch of 'Copilot+' PCs with built-in artificial…
Argentina's soybean harvest has been significantly delayed due to rains and persistently low prices, leading…
On Monday, oil prices inched higher on anticipated lower US interest rates and rebounded Chinese…
The UK government on Monday took a significant step with its artificial intelligence (AI) endeavors,…
On Friday, Nvidia Corp.'s shares slid after Microsoft collaborated with AMD to navigate the advanced…
On Thursday, Reddit shares rose amid its collaboration with OpenAI to train ChatGPT on the…
This website uses cookies.