Global Recession Oil prices seen slightly lower in Asian trading on Wednesday afternoon. January 4, 2023. The decline was weigh down by concerns about weak demand due to the state of the global economy. And increasing cases of Covid-19 in China. Brent crude futures for March delivery shed 43 cents. Or 0.5 percent, to trade at $81.67 a barrel by 0700 GMT. US crude futures slipped 39 cents, or 0.5 percent, to trade at 76.54 dollars per barrel.
Both benchmarks plunged more than 4.0 percent on Tuesday. With Brent suffering its biggest one-day loss in more than three months. Warning signs of global recession. China’s sluggish recovery with surging Covid-19 cases, renewed strength in the US dollar. And subdued risk sentiment were all catalysts that kept oil prices under control overnight.” Said Yeap Jun Rong, market analyst at IG, in a note.
The Chinese government also increased export quotas for refined petroleum products in the first batch for 2023. Signaling expectations of poor domestic demand. Top oil exporter Saudi Arabia may cut prices further for its flagship Arab Light crude to Asia in February. After being seta 10-month low for this month. As oversupply fears continue to loom over the market. The market is still worri about the impact of macro factors such as downward pressure on the economy.” Said an analyst from Haitong Futures.
Next: IMF Chief Warns of Difficult Global Economy in 2023
The head of the International Monetary Fund (IMF). Warned that most of the global economy will have a difficult year in 2023. As the main engines of global growth – the United States, Europe and China – all experience weak activity. The Fed also raised interest rates by 50 basis points (bps) in. December after four consecutive increases of 75 basis points each. If the Fed intensifies interest rate hikes, it could slow down the economy and stifle fuel consumption.
Giving oil some support, the dollar weakened on Wednesday after posting big gains in the previous session. A weaker dollar usually increases demand for oil as the dollar-denominated commodity becomes cheaper for holders of other currencies. US crude oil stockpiles likely rose by 2.2 million barrels. With distillate inventories expected to fall, a Reuters preliminary poll showed on Monday, January 2, 2023.
Industry group the American Petroleum Institute (API) will release data on US crude inventories at 1630 local time (2030 GMT). The Energy Information Administration, the statistics arm of the US Department of Energy. Will release its own figures on Thursday, January 5, 2023 at 10:30 local time (1430 GMT).
