A plethora of bearish factors is driving oil prices lower, with both WTI and Brent set for a third weekly loss in a row. Whilst crude prices have been relatively range-bound recently, hovering within the $80-85 per barrel range, they are poised to suffer their third weekly decline in a row. Beyond the backwardation in the futures markets, several trends point towards a further weakening in crude.
The Biden Administration is expected to take a decision on further SPR releases in the upcoming days. In addition, demand prospects have soured a bit lately as OPEC cut its Q4 2021 demand forecast by 330,000 b/d as high energy prices and inflation hamper economic recovery. Last but not least, a strengthening dollar is putting additional pressure on crude. Against this background, the Brent global benchmark traded around $82 per barrel, whilst WTI was assessed around $80.5 per barrel, OilPrice said.
Oil prices post third weekly drop after volatile week. Brent and WTI crude reverse previous session’s gains. Both benchmarks post third consecutive weekly decline. U.S. drillers add oil and gas rigs for 3rd week in row. Oil prices fell on Friday, wiping out gains from the previous session, on worries that the U.S. Federal Reserve will accelerate plans to boost interest rates to tame inflation, Reuters reports.
Oil prices fluctuate more than most consumer prices. Big gains are often followed by large declines, and vice versa, so the recent uptick cannot be projected into the distant future. Oil prices have increased significantly from their pandemic lows and are substantially higher than 2019 levels. They don’t match the pre-fracking era of $100 oil, but they may get up there. The outlook for oil prices is driven largely by global economic growth, but it’s a complicated relationship. Gasoline prices to consumers, of course, will respond with oil prices, Forbes said.