Home ›› 23 Jul 2022 ›› World Biz
Oil prices fell on Friday on a weakening global demand outlook and the resumption of some Libyan crude oil output. Brent crude futures fell 55 cents to $103.32 a barrel by 1251 GMT, while US West Texas Intermediate (WTI) crude futures were down $1.05 to $95.30 a barrel.
The global economy looks increasingly likely to be heading into a serious slowdown, just as central banks aggressively reverse ultra-loose monetary policy adopted during the pandemic to support growth, data showed on Friday.
“Things are still negative on the economic front, but we are still in a structural shortfall for prompt oil and that means physical buyers will be there to support dips knowing the uncertainty of what lies ahead on the geopolitical front,” said Stephen Innes, managing partner at SPI Asset Management.
Innes said investors had next week’s US Federal Reserve decision on interest rates firmly on their minds. Fed officials have indicated that the central bank would likely raise rates by 75 basis points at its July 26-27 meeting.
“While 75 is in the cards, guidance will be important and any softening in the rate hike outlook would be great for global growth,” Innes added.
While signs of softening US demand weighed on oil prices and sent benchmark contracts sliding around 3 per cent in the previous session, tight global supplies continued to keep the market buoyed.
Supply fears were easing slightly though after Libya resumed production at several oil fields earlier this week.
“Libyan production is recovering, but with clashes in the capital no one knows how long the production recovery will hold,” Giovanni Staunovo, an analyst at UBS, said, referring to clashes between rival factions in Libya amid growing concern that a political standoff could prompt renewed conflict.
