Oil set to end turbulent week below $100 on economic slowdown fears
Oil is poised to end the week below $100 a barrel for the first time since early April after another volatile period of trading marked by escalating concerns over an economic slowdown.
West Texas Intermediate tumbled below $91 a barrel on Thursday, erasing all of the gains seen in the wake of Russia’s invasion of Ukraine in late February, before clawing back some of those losses. Futures edged higher on Friday, but the US benchmark is still down around 8% for the week.
President Joe Biden is scheduled to touch down in Saudi Arabia on Friday as part of a Middle East tour, just days after a report showed US inflation surged to a four-decade high last month, much of it driven by energy costs. He is expected to leave the region without a public announcement on increasing oil supply, people familiar with the matter said.
China’s economy, meanwhile, grew at the slowest pace since the Wuhan outbreak.
“Brent has dipped noticeably below $ 100 per barrel this week,” Commerzbank analysts including Carsten Fritsch and Barbara Lambrecht wrote in a note to clients. “It is likely to continue sliding given that the recession fears will presumably not abate for the time being.”
A stronger dollar and Covid-19 outbreaks in China have added to pressure on oil this week. Shanghai’s flareup appears to be stabilizing, but authorities are still locking down parts of the city and housing compounds as infections rise.
In Libya, the country’s new oil chief said output will return to its maximum level in a week. The country’s production has plunged amid domestic unrest.