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Oil prices slump again on recession fear, swelling US fuel inventories

by Business News Report

 Oil prices slid by roughly $2 a barrel to their lowest level in about three weeks on Thursday on fears of that a possible recession could dent fuel demand and evidence of swelling U.S. gasoline inventories. Brent crude futures were down $1.95, or 2.4%, to trade at $81.17 a barrel. West Texas Intermediate crude (WTI) futures dropped $1.72, or 2.2%, to $77.44 a barrel. Both benchmarks fell 2% on Wednesday and are at their lowest since late March, just before a surprise OPEC+ cut announcement. Equities markets, which often move in tandem with oil prices, were down after disappointing results from Tesla and other companies.

“At the end of the day, one of the big reasons why we’re sliding is fear of recession,” said Bob Yawger, executive director of energy futures at Mizuho. The number of Americans filing new claims for unemployment  benefits increased moderately last week, indicating the labor market was gradually slowing after a year of interest rate hikes by the U.S. Federal Reserve. Easing some concern about a rate hike-induced recession in world’s largest oil consuming nation, a economists polled by Reuters expected  the Fed to end its tightening with a final 25 basis point rate rise in May.

In Britain, persistent double-digit inflation has bolstered expectations of a further Bank of England rate hike. U.S. crude stockpiles fell by 4.6 million barrels as refinery runs and exports rose, while gasoline inventories jumped unexpectedly, according to the U.S. Energy Information Administration. , Implied gasoline demand also fell 3.9% from year-ago levels to 8.5 million barrels a day. Oil loading from Russia’s western ports in April is likely to rise to highest since 2019, trading and shipping sources said. Pakistan has placed its first order for discounted Russian crude under a new deal which could cover 100,000 barrels per day, the country’s petroleum minister said. Reuters

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