Oil prices fell by around 6% on Friday, reaching a four-week low.This was due to worries that big national banks raising loan rates could slow the world economy and make people less interested in buying energy.
This week, the U.S. dollar rose to its highest level since December 2002 against a basket of other currencies. This made oil more expensive for people who buy it with different currencies.
Brent futures fell $6.69, or 5.6%, to $113.12 per barrel, and U.S. West Texas Intermediate (WTI) crude fell $8.03, or 6.8%, to $109.56 per barrel.
Since May 20, that was the lowest close for Brent and the highest close for WTI since May 12. It was also the biggest daily price drop for Brent since the beginning of May and for WTI since late March.
Brent’s chances for the week went down for the first time in five weeks, while WTI’s dropped for the first time in about two months.
On Juneteenth, which is on Monday, there will be no U.S. exchange.
“Rough prices went down because the dollar got stronger, Russia said oil prices should go up, and fears of a global recession grew,” said Edward Moya, a senior market analyst at the information and analysis company OANDA.
World-wide national financiers, who quickly put out money-related plans during the pandemic to avoid a recession, are now getting ready to fight growth.
This week, the Federal Reserve raised U.S. interest rates by the most in more than a quarter of a century.
John Kilduff, a partner at Again Capital LLC in New York, said that more slow economic growth should make people less interested in energy. “National banks are taking pretty big steps to slow down growth by raising loan rates and doing financial repairs,” he said.
Since the Fed is likely to keep raising interest rates on loans, open revenue in WTI futures on the New York Mercantile Exchange fell on Thursday to its lowest level since May 2016 as investors cut back on risky resources.
Gasoline and diesel sales in the United States fell by more than 4% as a result of concerns that high pump prices would turn people off.
AAA said that the price of diesel at the pump hit a record high of $5.988 per gallon on Friday. Before the week, the price of gasoline hit a record high of $5.016, but that price has since dropped.
This week, U.S. energy companies only added four oil rigs. This is because President Joe Biden slammed the companies for making money off of high costs instead of doing other things to help yield.
Even though his organization thinks Saudi Arabia should make more oil, Biden said he wouldn’t meet with Saudi Arabia’s leader, Mohammed bin Salman when he goes there next month. He said he only thought the Saudi crown prince was important for a larger “worldwide meeting.”
In the meantime, Russia expects its oil products to rise in 2022, despite approval from the West and a ban in Europe, the Russian representative energy service told Tass news agency on Friday.
Since Russia attacked Ukraine on Feb. 24, the market has become even more choppy.
On Friday, Russian gas flows to Europe fell short of what was needed because of an early intensity wave in the south. This made people more interested in cooling.
The head of the European Union suggested that Ukraine and Moldova become candidates to join the world’s largest trading alliance.
Italy’s Eni SpA (ENI.MI) has given permission for an oil big hauler to leave Venezuela soon with the first cargo to Europe in a long time.
