Oil swung between gains and losses after European economic data missed estimates, fanning concerns of an economic slowdown.
WTI for September delivery fell 0.1 per cent to $96.27/bbl at 9:29 a.m. in London, while Brent for September settlement edged higher to $103.96/bbl.
Germany’s economy is shrinking for the first time this year as inflation squeezes business and the war in Ukraine hits confidence. The dollar also climbed after the figures making commodities priced in the currency less attractive.
Traders are monitoring the impact of disruption along the Keystone pipeline. TC Energy has reduced operating rates on a segment running from Canada’s oilsands to the hub at Cushing, Okla., by about 15 per cent following a power-supply glitch. Cushing is the delivery point for WTI futures.
While crude remains more than a quarter higher this year, the bulk of the gains triggered by Russia’s invasion of Ukraine have been reversed. Central banks including the Federal Reserve have been raising interest rates to quell soaring inflation, triggering concerns of a slowdown that’ll sap demand for commodities including energy. That’s hurt investor interest in crude oil, and traders are also continuing to monitor China’s continued response to virus outbreaks.
“Recessionary fears and Covid resurgence continue to keep a tight lid on oil prices,” Keshav Lohiya, an analyst at consultant Oilytics said.
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