Oil prices continued to decline on Thursday, falling more than 2%, as investors reassessed the risk of recession and demand for fuel, as major economies raised interest rates.
Brent crude futures fell $2.5, or 2.3 percent, to $109.22 a barrel.
US West Texas Intermediate crude futures fell $2.6, or 2.7 percent, to $103.46 a barrel, according to “Reuters”.
The benchmark crude fell by as much as $3 a barrel in early Asian trading, after it had fallen by about 3% in the previous session.
Both are at their lowest levels since mid-May.
Investors continue to appreciate how worried they should be about the possibility of central banks driving the global economy into a recession, while trying to curb inflation by raising interest rates.
“Oil markets remained under pressure as investors were concerned that raising US interest rates would disrupt the economic recovery and weaken fuel demand,” said Kazuhiko Saito, chief analyst at Fujitomi Securities.
For his part, Federal Reserve Chairman (US Central Bank), Jerome Powell, said yesterday, Wednesday, that the bank is not trying to cause a recession as it seeks to curb inflation, but is fully committed to keeping prices under control, even if this raises the risk of recession.
“With more data coming out proving that Russian crude supplies are less affected by the sanctions than most people previously thought, the supply side may see a larger-than-expected increase in the near term,” analysts from Haitong Futures wrote.
Russian President Vladimir Putin said, on Wednesday, that Moscow is about to change the course of its trade and oil exports towards countries from the BRICS group of emerging economies due to Western sanctions.
China’s imports of Russian crude oil in May rose 55 percent from a year earlier, hitting a record.