Oil Futures Recover From Day’s Lows, But Still End On Weak Note

Crude oil prices recovered from lower levels on Monday amid concerns over tight supplies, but still ended the day’s session on a weak note due to worries about outlook for energy demand.

The dollar’s strength weighed as well on oil prices.

Meanwhile, natural gas prices climbed to fresh 14-year highs.

West Texas Intermediate Crude oil futures for September ended lower by $0.54 or about 0.6% at $90.23 a barrel, after dropping to a low of $86.30 at one stage.

Brent crude futures settled at $96.48 a barrel today, down $0.24 or about 0.3% from the previous close.

The dollar moved higher against most of its major rivals amid rising bets over interest rate hikes by the Federal Reserve, after another Fed official flagged the likelihood of continued aggressive monetary tightening.

Richmond Fed President Thomas Barkin said central bankers were inclined towards faster, front-loaded interest rate increases, even if that meant risking a U.S. economic recession.

Bundesbank President Joachim Nagel told German newspaper Rheinischen Post that inflation in Germany could hit a 70-year high of 10 percent this fall as Russian natural-gas supplies slow.

A recession appears likely next winter but the European Central Bank should continue increasing rates to tame inflation, he added as Russia announced a three-day halt to European gas supplies via the Nord Stream 1 pipeline at the end of this month, exacerbating the region’s energy crisis.

Worries over slowing fuel demand in China, the world’s largest oil importer, in part due to a power crunch in the southwest caused by a heatwave, also weighed on prices.

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