Oil drops $6 as recession fears deepen demand concerns

A view of the Phillips 66 Firm’s Los Angeles Refinery (foreground), which processes home & imported crude oil into gasoline, aviation and diesel fuels, and storage tanks for refined petroleum merchandise on the Kinder Morgan Carson Terminal (background), at sundown in Carson, California, U.S., March 11, 2022. REUTERS/Bing Guan

LONDON, July 5 (Reuters) – Oil costs dropped $6 on Tuesday as issues a couple of potential international recession curbing demand outweighed provide disruption fears, highlighted by an anticipated manufacturing minimize in Norway.

Brent crude was down $6.65, or 5.9%, at $106.85 a barrel by 1344 GMT, and U.S. West Texas Intermediate (WTI) crude fell $5.65, or 5.2%, to $102.78 a barrel from Friday’s shut. There was no WTI settlement on Monday due to a U.S. vacation.

Buyers have gotten extra involved as the newest surge in gasoline and gas costs provides to worries about recession.

“Oil continues to be struggling to interrupt out from its present recessionary malaise because the market pivots away from inflation to financial despair,” Stephen Innes of SPI Asset Administration wrote.

Within the euro zone, knowledge confirmed enterprise progress throughout the bloc slowed additional final month, with forward-looking indicators suggesting the area may slip into decline this quarter as the price of residing disaster retains shoppers cautious. learn extra

In South Korea, inflation hit a close to 24-year excessive in June, including to issues about slowing financial progress and oil demand. learn extra

Provide issues nonetheless linger, initially lifting WTI and Brent earlier within the session, amid worries about potential output disruption in Norway, the place offshore staff started a strike. learn extra

The strike is predicted to cut back oil and gasoline output by 89,000 barrels of oil equal per day (boepd), of which gasoline output makes up 27,500 boepd, Norwegian producer Equinor (EQNR.OL) has stated.

Saudi Arabia, the world’s prime oil exporter, raised August crude oil costs for Asian consumers to close file ranges amid tight provide and sturdy demand. learn extra

In the meantime, Russia’s former president Dmitry Medvedev stated on Tuesday a reported proposal from Japan to cap the value of Russian oil at about half its present stage would imply much less oil in the marketplace and will push costs above $300-$400 a barrel. learn extra

G7 leaders agreed final week to discover the feasibility of introducing short-term import value caps on Russian fossil fuels, together with oil, in an try to restrict assets to finance Moscow’s “particular army operation” in Ukraine. learn extra

Reporting by Bozorgmehr Sharafedin in London, Additioanl reporting by Florence Tan and Muyu Xu; Enhancing by Alexander Smith and Edmund Blair

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