Oil Flat on Week as Oil Supply Risks Meet Economic Headwinds

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Pump jacks work at sunset in an oil field in Midland, Texas, U.S., August 22, 2018. REUTERS/Nick Oxford

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LONDON, May 20 (Reuters) – Oil prices edged lower on Friday as a planned European ban on Russian oil offset investor concerns about weakening economic growth and demand.

Brent crude futures for July fell 10 cents, or 0.1%, to $111.94 a barrel at 0920 GMT, while US West Texas Intermediate (WTI) crude for June fell 56 cents , or 0.5%, to $111.65 on the last day of the first month. .

The most actively traded WTI contract in July was down 0.23 cents at $109.66 a barrel.

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The International Monetary Fund (IMF) has urged Asian economies to be aware of the risks of contagion from monetary tightening.

Asian economies had to choose between supporting growth with more stimulus and withdrawing it to stabilize debt and inflation, IMF Deputy Managing Director Kenji Okamura said. Read more

While Bank of Japan policy works against a global shift to monetary tightening, central banks in the United States, Britain and Australia have recently hiked interest rates.

“If U.S. growth data continues to deteriorate, oil prices could get caught in the negative stock market feedback loop,” Stephen Innes, managing director of SPI Asset Management, said in a client note.

Despite rising fuel prices, however, Americans were getting back behind the wheel, according to a Federal Highway Administration report on vehicle miles traveled. Read more

The European Union hopes to strike a deal on a proposed Russian crude import ban, which includes exclusions for EU states most dependent on Russian oil, such as Hungary. Read more

“The chances of an EU embargo being declared sooner rather than later have increased following Germany’s success in more than halving Russian oil imports in a very short period of time,” the firm said. BCA Research consultancy in a note.

“Further reductions in German imports of Russian oil will make it easier for the EU’s largest economy to withdraw from imports of Russian crude and products sooner rather than later.”

Iran, meanwhile, is finding it harder to sell its crude now that more Russian barrels are available, as exports of Iranian crude to China have fallen sharply since the start of the war in Ukraine, with Beijing buying Russian barrels At a reduced price. Read more

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Additional reporting by Scott DiSavino; edited by Frank Jack Daniel and Jason Neely

Our standards: The Thomson Reuters Trust Principles.

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