On Friday, WTI oil futures increased over $86 a barrel, keeping the weekly drop to less than 1% as investors weighed the risks of reduced supply against the deteriorating outlook for global demand. President Putin threatened to immediately cease all energy supplies to Europe, including oil and coal, in response to price limitations on Russian natural gas that were being considered by EU ministers.
The producers in OPEC+’s vow to reduce output this week added to negative pressure. Still, vigorous monetary tightening by major central banks and new Covid lockdowns in China, the world’s largest importer, is expected to cause WTI futures to record losses for the second straight week. While Chairman Powell reaffirmed the Fed’s commitment to fighting inflation, the ECB announced a record 75 basis point rate increase.
The majority of Chengdu’s 21 million citizens were placed under a lockdown for a prolonged period of time in China, underscoring the nation’s rigid devotion to its zero-Covid plan, which stalls the nation’s economic recovery and casts doubt on the demand prognosis. In July 2008, crude oil had an all-time high, which was 147.27. By the conclusion of this quarter, crude oil prices are anticipated to be trading at 90.69 USD/BBL.