Oil prices fell $6 on Tuesday morning as worries about a potential global recession reducing demand exceeded supply disruption worries, which were emphasized by an anticipated reduction in Norwegian production.
By 1344 GMT, Brent crude had down by $6.65, or 5.9%, to $106.85 per barrel, while U.S. West Texas Intermediate (WTI) crude had decreased by $5.65, or 5.2 percent, to $102.78 per barrel from Friday’s closing. Due to a US holiday, there was no WTI settlement on Monday.
The most recent increase in gas and fuel costs has investors increasingly concerned as concerns about a recession grow.
According to Stephen Innes of SPI Asset Management, “Oil is still fighting to emerge from its present recessionary doldrums as the market pivots away from inflation to economic pessimism.”
As the cost of the living problem keeps consumers on edge, data from the eurozone show that business growth in the region slowed down even more last month. Looking ahead, evidence point to a potential fall this quarter. View More
Inflation in South Korea reached a nearly 24-year high in June, fueling additional worries about sluggish economic growth and falling oil demand. View More
As a result of ongoing supply issues and anxiety about a potential output disruption in Norway, where offshore workers have started a strike, WTI and Brent initially rose early in the session. View More
According to Norwegian producer Equinor, the strike is anticipated to reduce oil and gas production by 89,000 barrels of oil bpd, of which gas production accounts for 27,500 bpd.
Saudi Arabia, the world’s top oil exporter, raised August crude oil prices for Asian buyers to near-record levels amid tight supply and robust demand. View More
Dmitry Medvedev, a former president of Russia, stated on Tuesday that a rumored Japanese plan to cap the price of Russian oil at roughly half its current level would result in a major reduction in the amount of oil available on the market and may raise prices above $300-$400 per barrel.
According to reports, the plan was initially forth by Prime Minister Fumio Kishida. In response, Medvedev stated that Japan “would have neither oil nor gas from Russia, as well as no involvement in the Sakhalin-2 LNG project.”
Dmitry Medvedev, a former president of Russia, stated on Tuesday that a rumored Japanese plan to cap the price of Russian oil at roughly half its current level would result in a major reduction in the amount of oil available on the market and may raise prices above $300-$400 per barrel.
According to reports, the plan was initially forth by Prime Minister Fumio Kishida. In response, Medvedev stated that Japan “would have neither oil nor gas from Russia, as well as no involvement in the Sakhalin-2 LNG project.”
The Sakhalin-2 gas and oil project in Russia’s far east is now fully under the hands of President Vladimir Putin, who last week signed an order that could drive out Shell and the Japanese firms Mitsui & Co and Mitsubishi Corp.
Foreign shareholders must request a stake from the Russian government within one month in order to continue holding shares of the new company that will replace the current operational company, Sakhalin Energy Investment Company.
Last week, the G7 leaders decided to investigate the viability of enacting temporary import price limitations on Russian fossil fuels, including oil, in an effort to reduce the amount of money available to Moscow to fund its “special military operation” in Ukraine.
