Although there was some volatility in oil prices on Friday as investors processed an unexpected increase in U.S. crude stocks, substantial weekly losses were predicted due to worries that demand will be negatively impacted by slowing global economic growth.
Brent oil futures on the London market increased 0.4% to $88.88 a barrel, while U.S. By 20:30 ET, West Texas Intermediate futures were down 0.4% to $83.20 per barrel (00:30 GMT). Both futures were expected to see losses of more than 4% for the second straight week. Early this week, oil prices fell to levels not seen in over seven months as fears about decreasing demand in the world’s top oil importer, China, were raised by the country’s faltering imports. Following a string of COVID-19 lockdowns, the nation’s economic growth has significantly slowed this year.
What To Expect from Oil Market?
Oil prices were neutral on Friday as investors processed an unexpected increase in U.S. oil stocks, but they were headed for severe weekly losses due to worries that demand will be negatively impacted by slowing global economic growth.
The Organization of Petroleum Exporting Countries and its partners output reduction was mostly considered notional and achieved nothing to maintain prices. However, some traders purchased the dip on Thursday, which led to a minor recovery in oil prices. Toward 2023, the U.S. Energy Information Administration also predicted a somewhat greater demand and a tighter supply. A supply shortage can come from Russia’s threat to reduce the amount of oil supplied to select importers. The demand for crude oil is anticipated to rise in the winter due to a developing energy crisis in Europe.
Data released on Thursday revealed an unexpected increase in U.S. crude oil stocks over the previous week. However, traders said that the release of crude inventories from the nation’s Strategic Petroleum Reserve was to blame for the increase. Underlying oil demand in the United States looks to be strong, as demonstrated by a continuous drop in U.S. gasoline stockpiles over the previous month. Demand has also benefited from a decline in gasoline prices following record highs.