Home ›› 21 Jul 2022 ›› World Biz
Oil prices fell over $2 a barrel on Wednesday before recouping some losses, under pressure from global central bank efforts to limit inflation and ahead of an expected buildup in US crude inventories as fuel demand weakens.
Brent crude prices for September were down $1.81, or 1.69per cent, at $105.54 a barrel by 1215 GMT, while US West Texas Intermediate (WTI) crude for August slipped $1.62, or 1.55per cent, to $102.60 per barrel. The WTI contract will expire on Wednesday.
The more active September WTI contract was at $98.97 a barrel, down $1.77.
Oil prices whipsawed in the previous session, caught in a tug-of-war between supply fears caused by Western sanctions on Russia and expectations of economic weakness and reduced demand as central bankers indicated they will raise interest rates to combat inflation.
On Friday, open interest in New York Mercantile Exchange futures fell to its lowest since September 2015 as concerns that the Federal Reserve will keep raising US interest rates led investors to cut their exposure to risky assets.
“People have been switching out of Delta 1 products – just being long the futures or long via the index – into options because of the sharp pullback,” Stephen Innes, managing partner at SPI Asset Management, said in a note.
Adding to bearish sentiment, crude stocks in the United States rose by about 1.9 million barrels for the week ended July 15, according to market sources citing American Petroleum Institute figures on Tuesday. That was close to the forecast for a rise of 1.4 million barrels in a Reuters poll.
