Oil prices declined today, Thursday, after rising for two sessions, as investors continued to worry about a possible recession in the United States and weak demand for oil.
Brent crude fell 35 cents, or 0.40 %, to $86.98 a barrel by 04:36 GMT, while US West Texas Intermediate crude fell 29 cents, or 0.35 %, to $82.97.
Both benchmarks rose 2% on Wednesday to their highest level in more than a month, with OPEC countries voluntarily reducing their oil production to 1,660 barrels per day.
But the US tightening, which raised interest rates to their highest levels since 2007, raised concerns that the Fed’s focus on stemming inflation could stifle economic growth and future demand for oil in the world’s largest oil user.
On Wednesday, markets shrugged off a slight increase in US crude oil inventories, attributing this in part to a congressional-mandated release of oil from the US emergency reserve and lower exports at the start of the month.
The Energy Information Administration said yesterday that crude inventories rose by 597 thousand barrels last week, while gasoline and distillate inventories fell less than expected.
However, the oil market was rocked to the upside two weeks ago after the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia agreed to cut production.
Executive Director of the International Energy Agency, Fatih Birol said that as a result, the global oil market may witness a scarcity in the second half of 2023, which may push prices higher.
Source: National Iraqi News Agency