Oil Prices Start to Climb Again
2022.07.22 06:02
By David Ho
Investing.com – Oil was up on Friday, a change after sliding in the previous sessions from weakened demand in the U.S. and a rise in supplies from Libya.
Brent oil futures rose by 1.34% to $105.25 by 10:34 PM ET (2:34 AM GMT) while crude oil WTI futures fell 1.26%, to $97.56.
Data showed that U.S. gasoline demand had dropped nearly 8% from a year earlier in the midst of the peak summer driving season. Drivers were deterred by record prices and this led to the WTI taking a hit.
“At 8.52 million barrels per day, demand is at its lowest seasonal level since 2008, as high gasoline prices take their toll on consumers,” ANZ Research analysts said in a note.
The drop in WTI put the contract on track for a 1.3% drop this week, which would be its third consecutive weekly loss.
But in contrast, strong demand in Asia boosted the Brent benchmark, leading to its first weekly gain in six weeks.
Despite higher prices, Indian demand for gasoline and distillate fuels rose to record highs in June. The total refined product consumption ran at 18% more than a year ago and Indian refineries operating near their busiest levels ever, RBC analysts said.
“This signals much more than a strong recovery from COVID-plagued years,” said Michael Tran, RBC analyst, in a note.
However, the restart of output at several oil fields in Libya this week capped Brent’s gains.
Meanwhile, the European Central Bank (ECB) raised rates more than expected on Thursday looking to rein in inflation. ECB President Christine Lagarde cautioned that inflation risks had become higher, as the Ukraine war was likely to drag on and energy prices are to stay high for longer.
“Is the horizon clouded? Of course it is,” Lagarde said.
However, she believes there will be no recession this year or next.
