Oil Heads for Weekly Loss as Growth Fears Trump Supply Tightness

07/08/2022

1 minute read

2022.07.08 08:11

(Bloomberg) — Oil is set for a weekly loss after choppy trading in which concerns over a demand-sapping global slowdown clashed against signals that supplies remain tight.

West Texas Intermediate slipped toward $102 a barrel in early Asian trading, putting the US benchmark on course for a weekly fall of more than 5%. Prices have swung in a range of more than $16 this week, which saw both WTI and Brent briefly drop below $100.

Investors remain concerned that restrictive US monetary policy could herald a recession, and oil has been dragged lower alongside other commodities. Two of the Federal Reserve’s most hawkish policy makers, Christopher Waller and James Bullard, backed raising interest rates by another 75 basis points this month to curb red-hot inflation, while also playing down concerns of a slump.

Still, physical market signals remain robust, especially in the US. In addition, there may be interruptions to supplies. A crucial export route for Kazakh oil risks being suspended as it appeals a Russian court order for it to temporarily shut down.

Crude’s volatile trading means it’s down about 15% from last month’s high but still up more than 35% this year following Russia’s invasion of Ukraine. The complex market outlook has spurred banks to offer starkly different scenarios for prices, with Goldman Sachs Group Inc (NYSE:GS). remaining broadly bullish while Citigroup Inc (NYSE:C). has said the commodity is at risk of a tumble.

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07/08/2022

1 minute read