Home Editor's Picks Oil: The ‘R’-Word Rules as U.S. Crude Below $80 for Worst Week in 7

Oil: The ‘R’-Word Rules as U.S. Crude Below $80 for Worst Week in 7


Oil: The ‘R’-Word Rules as U.S. Crude Below $80 for Worst Week in 7 By Investing.com

Breaking News


Commodities 1 hour ago (Sep 23, 2022 11:10AM ET)

(C) Reuters.

By Barani Krishnan

Investing.com – It’s back, the buzzword most hated by oil longs.

Recession, or the ‘R’-word as it has come to be known, was omnipotent across commodity markets on Friday, sending gold to 2 1/2 -year lows while setting up ‘black gold’, or oil, for its worst weekly loss in seven as U.S. crude broke below $80 per barrel the first time since January.

Global equities at a two-year low, the dollar at 20-year highs, weak European purchasing managers indexes, and growth concerns from this week’s rate hikes by the Federal Reserve to the Bank of England made it a perfect storm for oil bulls.

“The market is clearly thinking economic slowdown,” said Scott Shelton, energy futures broker at ICAP in Durham, North Carolina.

“Whether or not physical [oil] grades are strong or weak matters not currently,” Shelton added, referring to warnings from long-leaning analysts that risk of war escalation in Ukraine by Russia and China’s opening up from COVID lockdowns could mean plenty of upside for oil in the coming weeks.

New York-traded West Texas Intermediate, which serves as the U.S. crude benchmark, was down $5.07, or 6.1%, to $78.42 per barrel by 10:55 ET (14:55 GMT). WTI earlier sank to a session low of $78.22.

For the week, WTI was down almost 8%, heading for its worst week since the end of July.

Brent, the London-traded global benchmark for oil, was down $4.72, or 5.1%, to $85.85, versus its intraday low of $85.51.

For the week, Brent was also down about 5%, heading for its worst week since the end of August.

“Central banks now appear to accept that a recession is the price to pay for getting a grip on inflation, which could weigh on demand next year,” said Craig Erlam, analyst at online trading platform OANDA.

“At the same time, the market still remains tight and OPEC+ is perfectly willing to restrict supply further even as it fails to deliver on quotas it has set itself so far. What’s more, a nuclear deal between the US and Iran looks no closer and Russia’s mobilization could pose a risk to its supply.”

Considering all these, “very little is probably priced in at this point,” Erlam added.

The European Union ratcheted up, on Thursday, its plans to put a cap on the price of Russian oil — a measure aimed at weakening Moscow’s ability to fund the war in Ukraine.

Nigeria’s Oil Minister Timipre Marlin Sylva, speaking on behalf of producer alliance OPEC+, meanwhile, threatened a cut in global crude output if prices continued to fall.

Neither announcement made much of an impact on the market.

Oil: The ‘R’-Word Rules as U.S. Crude Below $80 for Worst Week in 7

Bermuda weathers Hurricane Fiona but Canada braces for major joltBy Reuters – Sep 23, 2022

By Don Burgess and Eric Martyn HAMILTON, Bermuda/HALIFAX, Nova Scotia (Reuters) -Hurricane Fiona drenched Bermuda with heavy rain and buffeted the Atlantic island with…

Explainer-When EU embargo comes, where will Russia sell its crude oil?By Reuters – Sep 23, 2022

MOSCOW (Reuters) – Russia has ramped up oil shipments to Asia since Europe imposed sweeping sanctions, but still needs to re-route over a quarter of its crude exports away from…

Oil plunges to eight-month low on strong dollar, recession fearsBy Reuters – Sep 23, 2022

By Scott DiSavino NEW YORK (Reuters) -Oil prices plunged about 5% to an eight-month low on Friday as the U.S. dollar hit its strongest level in more than two decades and on fears…

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning

(C) 2007-2022 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Related News