UK-GCC trade deal could be done within a year, minister says

NEW YORK (Reuters) – Oil prices fell more than $2 a barrel on Thursday in volatile trading as investors weighed the risk that rising U.S. interest rates could trigger a recession and reduce demand for fuel .

Brent crude futures fell 2.26 cents, or 2%, to $109.48 at 1:04 p.m. ET (1704 GMT). U.S. West Texas Intermediate (WTI) crude futures were down $2.48, or 2.3%, at $103.71.

US Federal Reserve chief Jerome Powell said the central bank’s focus on fighting inflation was “unconditional” and the labor market was unsustainable, comments that stoked fears of further hikes rate.

Investors have tried to assess whether inflation-fighting central banks could push the global economy into recession by raising interest rates.

“Recession fears have their grip on the markets, but the change in mood is more one of declining optimism than rising pessimism,” said Julius Baer analyst Norbert Rucker.

Investors were also concerned that high gasoline prices had bottomed out and demand destruction would soon set in, said Robert Yawger, director of energy futures at Mizuho in New York. .

“It definitely made its way into the conversation,” said Yawger, who added that he thinks gasoline still has room to rise.

U.S. retail prices are currently averaging $4.94 a gallon, down about 10 cents from the peak, according to AAA.

Even outside the highs, fuel prices remained feverishly high and led US officials and oil executives to meet in an attempt to agree on a plan to ease the pain at the pumps. Major U.S. oil refiners and Energy Secretary Jennifer Granholm walked out of an emergency meeting on the issue without concrete solutions, according to a source familiar with the talks, but the two sides agreed to keep talking.

The most recent estimates from the American Petroleum Institute, according to market sources, showed U.S. crude and gasoline inventories rose last week, which also weighed on prices, Yawger said.

Official weekly estimates of U.S. oil inventories were due to be released on Thursday, but technical issues will delay those numbers until next week, the U.S. Energy Information Administration said.

Russia continues to find alternative customers for its oil, with China and India among the biggest buyers now that Western countries have sanctioned Moscow for invading Ukraine.

China’s crude oil imports from Russia in May rose 55% from a year earlier and reached record highs.

India is providing safety certification for dozens of ships run by a subsidiary of Russian shipping group Sovcomflot, allowing oil exports to India and elsewhere after Western certifiers withdrew their services.

About Chris McCarter

Check Also

Pound rate against dollar hits 10-week best as dollar slips and stocks rise

The exchange rate between the pound and the dollar (GBP/USD) jumped above 1.1700 and posted …