(London) Oil prices continued to fall on Friday, ending the week down sharply, as investors feared that rising interest rates in Europe and the United States would depress activity and therefore energy demand. .
Brent crude from the North Sea, for August delivery, fell 0.39% to $73.85, recovering some ground late in the session when earlier it lost 1.73%.
Its American equivalent, the barrel of West Texas Intermediate (WTI) for delivery the same month, fell 0.50% to 69.16 dollars after dropping almost 2% earlier in the session.
“Prices declined on fears that a recession in Europe and delayed stimulus in China could hurt global growth prospects,” said Edward Moya of Oanda.
“Major central banks have been aggressive in tackling inflation,” said Exinity analyst Han Tan.
“Bigger-than-expected rate hikes in the UK and Norway, coupled with the US Federal Reserve’s insistence that it has more rate hikes in store, have markets fearing a recession.” world,” he continues.
“Brokers fear that the Fed and others will cripple economic growth in the second half,” Edward Moya further summarized.
On Thursday, the Bank of England raised rates by 0.5 points on Thursday, bringing them to 5%. The Bank of Norway also opted for a 0.5 point hike, pushing its key rate to 3.75%.
The Swiss National Bank, meanwhile, raised its key rate by 0.25 points to 1.75%. Finally, the Turkish central bank pushed its main interest rate to 15% on Thursday, a major reversal in its monetary policy.
Meanwhile, on the supply side, “available data regarding (Russian) oil exports by sea and the processing of crude oil in the domestic market have not shown a noticeable decline so far,” notes Carsten Fritsh, analyst at Commerzbank.
Russia had however committed in February to reduce its production by some 500,000 barrels per day.
“If Russia were to continue to produce more oil than agreed, Saudi Arabia’s willingness to continue its voluntary production cuts could diminish,” Carsten Fritsh said, noting that it could also “jeopardize the cartel’s credibility.” enlarged tanker”, i.e. OPEC and its allies.
