Oil on Friday capped its longest string of daily losses this year as hawkish signals from US Federal Reserve officials added to concerns about a glut of crude piling up in storage.
A significant increase in US inventories and a broader risk-off sentiment sparked by the prospect of continued rate hikes from the Fed have weighed on oil this week.
The headwinds were exacerbated by the federal government’s plan to continue drawing down the country’s Strategic Petroleum Reserve, with 26 million more barrels set to be released into the market.
Photo: cnsphoto via Reuters
West Texas Intermediate for March delivery fell 2.74 percent to US$76.34, falling 4.24 percent from the previous week.
Brent crude, the international benchmark, for March delivery dropped 2.51 percent to US$83, down 3.92 percent weekly.
Crude has been stuck in a narrow channel since early December last year. Expectations that China’s return from COVID-19 lockdowns would boost global demand are being tempered by a US economy that is threatening to tilt into a recession under the weight of Fed hikes.
“The renewed range-bound trade in oil is causing the market to become wary, demanding more cyclical evidence to invest in the structural bull case,” Goldman Sachs Group Inc analysts led by Jeff Currie wrote in a note to clients.
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