Oil prices rose, during trading today, Thursday, July 7, 2022, to regain some of the large losses incurred during the previous two sessions.
Investors refocused on limited supplies, in conjunction with continuing fears of a global recession, after inflation in most countries of the world hit record levels.
Oil prices today
The price of the futures contract for the benchmark Brent crude – for September delivery – increased by 1.67%, to record 101.46 dollars per barrel.
The price of West Texas Intermediate crude futures – August delivery – also rose by 1.47%, to $99.69 a barrel, according to data seen by the specialized energy platform.
On Wednesday, oil prices closed at their lowest level since April 11, and the decline came after a significant drop on Tuesday, despite tight global supplies.
West Texas Intermediate crude fell, on Tuesday, by 8%, while Brent crude fell by 9%, a decrease of $ 10.73, which is the third largest decline for the benchmark crude since it began trading in 1988.
“Recession fears continue to grow, and that obviously raises some concerns about the demand outlook,” said Warren Patterson, head of commodity research at ING.
He added that it is difficult to expect a significant drop in oil prices; The monthly spreads for Brent crude are still in wide decline; This indicates a shortage of supplies, especially that spot crude prices are higher than the prices of the coming months.
Patterson noted that the recent Iran nuclear talks do not appear to have achieved much, Reuters reported.
Washington tightened sanctions on Iran on Wednesday and put pressure on Tehran as it seeks to revive the 2015 Iran nuclear deal.
The Eurasia Consulting Group cut the odds of a US-Iran deal this year to 35% from 40%, saying Tehran was “likely to be ambivalent” about the deal.
In recent weeks, oil prices have fallen along with other commodities such as metals and palm oil as central banks around the world have raised interest rates to fight rising inflation; Which raised fears of a sharp economic slowdown and damaged demand for goods.
FGE Consulting still expects demand growth of about 2 million barrels per day until the end of 2023; The looming economic slowdown is countered in part by an ongoing recovery in mobility.
“If the expected recession is not severe, the price of crude oil should remain in the $100 per barrel range for the next two to three years,” said FGE analyst Feridun Fisherky.
Traders are watching for possible disruptions to oil supplies in the Caspian Sea Pipeline Consortium, which a Russian court has ordered to suspend activity for 30 days.
Exports in the Caspian Sea pipelines, which handle about 1% of global oil supplies, were still flowing as of Wednesday morning.
In addition, investors are awaiting US government data due on Thursday, which will shed light on the state of domestic oil and fuel inventories.
And industry data showed, yesterday, Wednesday, that US oil stocks rose by 3.8 million barrels, last week, and gasoline stocks fell by 1.8 million barrels, while distillate stocks fell by 635,000 barrels.