Oil prices fell sharply on Friday amid fears of a recession and disappointing figures in the United States amid rising interest rates by central banks. Brent crude for August delivery fell 5.58% to $ 113.12 an ounce. West Texas Intermediate (WTI) July futures fell below $ 110 for the first time in three weeks. It lost 6.82% and ended at $ 109.56.
“This is good news for gasoline prices.” On the eve of a long vacation in the United States, said Andy Lipow from Lipow Oil Associates. “Rising interest rates around the world will hurt consumers’ wallets. I think that will lead to a reduction in demand and lower prices.”, assured the analyst. The US Federal Reserve raised interest rates by 0.75 percentage points on Wednesday, the highest level since 1994, when US inflation hit record highs. But it also risks slowing down the economy.
Consequently, fears of a possible recession in the United States, a major consumer of raw materials, affected prices. The price of a gallon of gasoline at the US gas station fell by almost 10 cents on Friday, reaching $ 5. “I expect that during the next seven days the prices of gasoline will decrease by 5 cents per gallon.”, said Andy Lipow. Compared to last Friday, WTI fell by more than 7%, and the North Sea Brent by more than 6%, returning to the level of prices in late May and early June, respectively. A disappointing new figure in the United States added to the gloomy mood.
Industrial production in the United States slowed in May, more than expected, according to a statement released by the US Federal Reserve on Friday, which also showed a decline in industrial production. Another downside is Libya’s oil production remains at around 700,000 barrels a day, according to the Financial Times, despite clashes that have rocked the country into a long, serious political and institutional crisis.
Source: Le Figaro
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