Oil prices fell more than 4% today. Brent Crude edged higher after seeing $101. Depending on closing prices, there may be a gas discount tomorrow.

Oil prices plummeted, eyes on gas stations

Oil prices fell more than $5 a barrel today. Rising gasoline inventories in the United States raised demand concerns, and energy supply fears were eased by news from Libya and Russia.

Brent crude oil for September delivery fell more than 4% to $101.50 a barrel, then started to rise and erased some of its losses.

West Texas type crude oil for September delivery also fell to $94.59.

INCREASE INTEREST CAN REDUCE DEMAND

Oil prices have been fluctuating for some time. Traders have been trying to balance weak energy demand with tighter supplies since Russia launched military action against Ukraine.

The European Central Bank (ECB) interest rate hike of 50 basis points today is expected to lead to an economic slowdown and lower demand for oil.

European stocks, which typically move with oil prices, also fell ahead of the interest rate decision.

The Bank of Japan, meanwhile, predicted that inflation will exceed the target this year in its new forecast released today. However, the bank kept interest rates very low.

FUEL PRICES IN THE UNITED STATES HAVE BEEN DOWN FOR A MONTH

U.S. gasoline inventories rose by 3.5 million barrels last week, government data showed Wednesday. The amount was beyond analysts’ forecasts.

U.S. retail fuel prices have fallen for 37 straight days.

Stephen Brennock, oil analyst at PVM, said that in the summer, when auto use is at its peak in the United States, gasoline demand struggles to kick into high gear.

PRODUCTION IN LIBYA WILL INCREASE TO 1.2 MILLION BARREL DAYS

The Libyan National Petroleum Corporation (NOC) said yesterday that crude oil production had resumed at several oilfields after force majeure on oil exports was lifted last week.

More than 700,000 barrels per day are produced in Libya, Bloomberg reported. Production is expected to increase to 1.2 million barrels per day in 7 to 10 days.

Oil prices, which recovered for most of the first half of the year after the start of the Russian-Ukrainian war, have fallen in recent weeks on fears of recession, central bank tightening and vast movements of investors away from commodities.

Prices have fluctuated wildly from time to time this week as the market is dominated by instability.

ENERGY CONSUMPTION UNDER PRESSURE IN CHINA

In Asia, however, China’s measures to contain Covid-19 continued to suppress energy consumption and slow regional growth.

The Asian Development Bank lowered its forecast for gross domestic product growth in emerging Asia as Beijing’s approach to Covid-19 created volatility.

CAN I GET A DISCOUNT ON FUEL?

After oil prices fell, all eyes turned to fuel prices. Falling oil may lead to lower fuel prices in Turkey, indexed to international prices, but the increase in the dollar/TL exchange rate reduces the amount of the discount.

Industry sources have said that depending on today’s international price closing levels, there could be a discount on gasoline tomorrow night, but that’s not clear yet.

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