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Oil falls into uncertainty over recovery in fuel demand

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Oil prices fell on Friday as investors feared weakening global economic growth and central bank monetary tightening could curb recovery in fuel demand.

Brent crude in July fell 63 cents (0.56%) to $ 111.41 a barrel by 0332 GMT, while West Texas Intermediate (WTI) crude in June fell $ 1.36 (1.21%) on the last day of the previous month. And it became 110.85 dollars.

More actively traded WTI contracts in July fell 0.82% to $ 108.99 a barrel.

The International Monetary Fund (IMF) called on the Asian economy to be aware of the spillover risks of monetary tightening.

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Kenji Okamura, Deputy Managing Director of the IMF, said the Asian economy faced the choice of supporting growth with more stimulus or withdrawing growth to stabilize debt and inflation.

The Bank of Japan’s policies are going against the global shift to monetary tightening, but central banks in the US, UK and Australia have recently raised interest rates.

Crude oil rises this week are limited, and Brent and WTI are mostly trading in the range due to uncertainties in the demand path. Investors concerned about rising inflation and more aggressive behavior from central banks have reduced their exposure to higher-risk assets.

Open interest on WTI futures fell to 17.22 million contracts on May 18, the lowest since July 2016.

“If US growth data continues to deteriorate, oil prices can get caught up in a negative feedback loop in the stock market,” said Stephen Innes, managing director of SPI Asset Management, in a client note.

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In the United States, Americans were holding the handle despite high fuel prices, according to a report from the Federal Highway Authority on vehicle miles.

On the gasoline supply side, South Korea’s third-largest refiner, S-Oil, has shut down production of its second alkylating system and related processes at its hot spring refinery due to the explosion.

Shutdowns after one person’s death in a Thursday night explosion are expected to affect Asia’s already tight gasoline supply.

Citi analysts predict that S-Oil’s gasoline production will be “seriously affected” in the short term, although it may buy Alchelet to sustain production.

Meanwhile, Iran is struggling to sell crude oil as more Russian barrels are available.

Since the beginning of the Ukrainian War, Iran’s crude oil exports to China have declined significantly. Beijing favored a significantly reduced Russian barrel, storing about 40 million barrels of Iranian oil in Asian maritime tankers and seeking buyers. (Report by Scott DiSavino, edited by Cynthia Osterman and Kim Coghill)

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Oil falls into uncertainty over recovery in fuel demand

Source link Oil falls into uncertainty over recovery in fuel demand

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