Oil extends losses as recession fears mount

Sticker reads crude oil on the facet of a storage tank within the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. REUTERS/Angus Mordant/

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TOKYO, June 23 (Reuters) – Oil costs fell 2% in early commerce on Thursday, extending losses from the day gone by, as traders anxious that aggressive U.S. rate of interest hikes might set off a recession and dent gas demand.

U.S. West Texas Intermediate (WTI) crude futures fell $2.39, or 2.3%, to $103.80 a barrel by 0031 GMT. Brent crude futures dropped $2.24, or 2.0%, to $109.50 a barrel.

Each benchmarks tumbled round 3% on Wednesday to hit their lowest ranges since mid-Could.

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Buyers are persevering with to evaluate how anxious they should be about central banks probably pushing the world financial system into recession as they try and curb inflation with rate of interest will increase. learn extra

“Oil markets remained beneath stress as traders have been involved that U.S. price hikes would stall an financial restoration and dampen gas demand,” mentioned Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.

“The U.S. and European hedge funds have been promoting off their positions forward of the top of the second quarter, which can be cooling investor sentiment,” he mentioned, predicting the WTI might fall beneath $100 a barrel earlier than the July four vacation in the USA.

The Federal Reserve shouldn’t be attempting to engineer a recession to cease inflation however is absolutely dedicated to bringing costs beneath management even when doing so dangers an financial downturn, U.S. central financial institution chief Jerome Powell mentioned on Wednesday. learn extra

U.S. President Joe Biden, in the meantime, known as on Congress to go a three-month suspension of the federal gasoline tax to assist fight report pump costs and supply non permanent aid for American households this summer time. learn extra

“The information quickly boosted the oil product costs, nevertheless it was later considered that even when the gasoline tax was suspended, retail costs would stay excessive, making it tough to stimulate demand,” Fujitomi’s Saito mentioned.

The U.S. Vitality Data Administration mentioned its weekly oil knowledge, which was scheduled for launch on Thursday, will probably be delayed on account of programs points till no less than subsequent week.

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Reporting by Yuka Obayashi; modifying by Richard Pullin

Our Requirements: The Thomson Reuters Belief Rules.

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