New York June 17 2022: Oil prices tumbled about 5% to a three-week low on Friday, led by a slump in U.S. gasoline futures, as interest rate hikes from major central banks fuelled worries about a sharp economic slowdown.
Brent futures fell $5.85, or 4.9%, to $113.96 a barrel by 11:02 a.m. EDT (1502 GMT), while U.S. West Texas Intermediate (WTI) crude fell $6.66, or 5.7%, to $110.93.
For the week, Brent was on track for its first weekly dip in five weeks, and WTI was on track for its first decline in eight weeks as concerns grow that interest rate hikes could cause a recession.
Those fears helped pressure U.S. gasoline futures down by over 7% with analysts worrying high gasoline prices will start impacting demand for the fuel.
Automobile group AAA said the price of diesel at the pump hit a record high $5.798 per gallon on Friday, while the price of gasoline hit its record of $5.016 earlier in the week.
Global central bankers, who shared the limelight for skirting a pandemic-driven depression with quick action two years ago, are now stumbling through the aftermath as they try to quell an inflation surge none predicted or have been able to forestall.
Those fears helped pressure U.S. gasoline futures down by over 7% with analysts worrying high gasoline prices will start impacting demand for the fuel.
Automobile group AAA said the price of diesel at the pump hit a record high $5.798 per gallon on Friday, while the price of gasoline hit its record of $5.016 earlier in the week.
Global central bankers, who shared the limelight for skirting a pandemic-driven depression with quick action two years ago, are now stumbling through the aftermath as they try to quell an inflation surge none predicted or have been able to forestall.
But with the Fed expected to keep raising interest rates, open interest in WTI futures on the New York Mercantile Exchange fell on Thursday to its lowest since May 2016 as investors cut back on risky assets like commodities.
The global oil market continues to show signs of “turbulence”, Russian Deputy Prime Minister Alexander Novak said, blaming the uncertainties over oil production recovery in Libya, Iran and Venezuela and a lack of energy infrastructure.
Much of that turbulence, however, was due to Russia’s actions since its invasion of Ukraine on Feb. 24.
Italy may declare a heightened “state of alert” on natural gas next week if Russia continues to curb its supplies, two government sources said after energy company Eni (ENI.MI) reported a shortfall in flows from Moscow for the third day in a row.
The European Union’s executive, meanwhile, recommended that Ukraine and Moldova become candidates for membership, a milestone in their potential path from former Soviet republics to developed economies in the world’s largest trading bloc.
