Canadian company Proto secures new funding for global expansion
By Adedapo Adesanya
Oil prices fell further on Thursday to their lowest levels before Russia’s invasion of Ukraine in February on the possibility of an economic recession later this year that could affect energy demand.
Brent crude futures stabilized $2.66 or 2.75% at $94.12 a barrel, and US West Texas Intermediate (WTI) crude futures stabilized down $2.34 or 2.12% at $88.54 a barrel.
Crude oil had jumped to over $120 a barrel earlier in the year following the COVID-19 pandemic which coincided with supply disruptions resulting from sanctions imposed on the main Russian producer following its invasion from Ukraine.
However, with recession fears hanging over the market, those gains have been wiped out.
The Bank of England (BoE) raised interest rates on Thursday and warned of recession risks.
This is further affected after the Energy Information Administration (EIA) of one of the world’s largest consumers, the United States, reported a significant increase in crude oil inventories of 4.5 million barrels for the week before July 29.
The main bearish signal for crude appears to come from data showing an unexpected and large increase in US commercial crude inventories and a drop in fuel demand for the week ended July 29.
Analysts noted that the build-up of U.S. inventories and growing concerns about oil demand in slowing economies were more important drivers of oil prices than Wednesday’s decision by OPEC+ to increase targeted collective oil production. of the 100,000 barrels per day band in September.
OPEC+’s agreement on Wednesday to raise its production target equivalent to 0.1% of global demand, was seen by some analysts as bearish for the market.
The rise is one of the smallest since OPEC quotas were introduced in 1982, according to cartel data.
OPEC heavyweights Saudi Arabia and the United Arab Emirates are also ready to provide a “significant increase” in oil production if the world faces a serious supply crisis this winter.
The demand outlook, however, remains clouded by growing worries about an economic collapse in the United States and Europe, over-indebtedness in emerging market economies and a strict zero COVID-19 policy in China, the largest importer. of oil in the world.