Oil extends losses as recession fears mount By Reuters

© Reuters. FILE Photo: Sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, US November 22, 2019. REUTERS/Angus Mordant/

By Yuka Obayashi

TOKYO (Reuters) – Oil prices fell 2% in early trade on Thursday, extending losses from the past working day, as traders worried that intense US fascination level hikes could result in a recession and dent fuel need.

US West Texas Intermediate (WTI) crude futures fell $2.39, or 2.3%, to $103.80 a barrel by 0031 GMT. futures dropped $2.24, or 2.%, to $109.50 a barrel.

Equally benchmarks tumbled around 3% on Wednesday to hit their most affordable levels since mid-May possibly.

Traders are continuing to assess how anxious they will need to be about central banks most likely pushing the planet economic system into recession as they try to control inflation with curiosity rate boosts.

“Oil markets continue to be beneath stress as traders ended up worried that US price hikes would stall an economic recovery and dampen gasoline need,” said Kazuhiko Saito, main analyst at Fujitomi Securities Co Ltd.

“The US and European hedge resources have been selling off their positions in advance of the stop of the next quarter, which is also cooling trader sentiment,” he mentioned, predicting the WTI could drop beneath $100 a barrel before the July 4 holiday getaway in the United States.

The Federal Reserve is not attempting to engineer a recession to prevent inflation but is fully fully commited to bringing rates less than manage even if carrying out so challenges an financial downturn, US central financial institution main Jerome Powell stated on Wednesday.

US President Joe Biden, henceforth, termed on Congress to pass a 3-month suspension of the federal gasoline tax to enable battle document pump price ranges and offer non permanent relief for American people this summer season.

“The news briefly boosted the oil products charges, but it was afterwards viewed that even if the gasoline tax was suspended, retail price ranges would remain significant, earning it difficult to encourage demand,” Fujitomi’s Saito mentioned.

The US Energy Information and facts Administration explained its weekly oil data, which was scheduled for release on Thursday, will be delayed thanks to systems challenges until eventually at minimum next week.