Crude oil fell early in the trading week, extending its biggest weekly drop since April amid continued concerns over weak demand.
After dropping almost 10% last week on weak US fuel consumption data, West Texas Intermediate fell below $88 a barrel in early Asian trading. Investors have retreated from commodities in recent months amid growing concerns that slowing growth will reduce energy use. This is reduced liquidity.
Oil prices are on a roller coaster ride in 2022, with a surge early in the year following Russia’s invasion of Ukraine and a decline since June as fears of the global economic downturn accelerated. Rising inflation has prompted central banks, including the US Federal Reserve, to raise interest rates, and investors expected to continue raising interest rates in the immediate post.
Corp Goldman Sachs Group analysts, including Damien Courvalin, said in an August 7 note that the two had slashed the bank’s short-term price forecasts while arguing over a recovery. that the oil market will remain unsustainable at current prices. “
The drop in oil early Monday came despite data released over the weekend showing that China’s crude imports rose in July from a four-year low as travel and shipping activity slowed. Loads improved after the easing of Covid-19 restrictions. However, the country’s annual total is still about 4% lower.
As the oil market remains in an uptrend, key differences have narrowed in recent weeks, suggesting easing tensions. The Brent rapid spread, the difference between the two closest contracts, was $1.69 a barrel on Monday, down from $3.56 a month ago.
The price of gasoline also continued to decline along with the price of crude oil, which will be appreciated by US President Joe Biden as his administration works to combat inflation. The national average retail price of gasoline decreased for 54 straight days up until this past Saturday, reaching slightly over $4 per gallon, according to car club AAA. In June, they surpassed a record high of $5.
The decrease in pump costs, according to Goldman Sachs, is not expected to persist long. Investors are preparing for a burst of market commentary this week as oil prices are barely above six-month lows. On Tuesday, the US Energy Information Administration will present its short-term outlook. On Thursday, the OPEC Group of Producers and the International Energy Agency will present their monthly outlooks.