Oil prices fell sharply on Friday and throughout the week, as traders grew concerned about the potential impact of future U.S. interest rate hikes on demand and mounting evidence of abundant crude and fuel supplies. Brent crude ended the day down $2.14, or 2.5%, at $83 per barrel; West Texas Intermediate (WTI) U.S. crude ended the day down $2.15, or 2.7%, at $76.34 per barrel.
“Rate hike jitters have returned with a vengeance,” PVM oil broker Stephen Brennock said. The news that Russian producers have no plans to reduce exports added to market pressure. While U.S. inventories rose to their highest level since June 2021, indicating an abundance of supply.
February’s unseasonably warm weather reduced heating oil cracks by 5%. Oil and gas rigs dropped by 1, but are still 115 higher than last year.
Saudi Arabia’s energy minister said OPEC+’s 2 million-barrel-per-day production cut would continue until December 31, but warned about Chinese demand.
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