Oil prices fall in line with expectations – Markets

NEW YORK (Reuters) – Oil prices fell about 2% on Friday on expectations that supply disruptions in the U.S. Gulf of Mexico would be short-term, while fears of recession clouded the outlook for demand.

Futures, however, were still on course for a weekly gain. Brent crude futures fell $1.47, or 1.5%, to $98.13 a barrel as of 11:10 a.m. EDT (1510 GMT), while U.S. West Texas Intermediate crude ( WTI) fell $2.08, or 2.2%, to $92.26 a barrel. Both contracts gained more than 2% on Thursday.

“We’re pulling back a bit from yesterday’s big rally,” said Price Futures Group analyst Phil Flynn. Brent was on track for a 3.5% gain this week after falling 14% last week on fears that rising inflation and interest rates could affect economic growth and the fuel request. WTI was on track for a 3.7% gain.

Crews were to replace a damaged pipeline by the end of the day Friday, a Louisiana port official said, allowing production to resume at seven U.S. oil rigs off the Gulf of Mexico. On Thursday, the main US oil producer in the Gulf of Mexico, Shell, said it had halted production at three deepwater rigs in the region. The three platforms are designed to produce up to 410,000 barrels of oil per day combined.

The market also absorbed contrasting demand views from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA).

“We are seeing an economic downturn, but it’s not clear if it’s as big a downturn as some of the recent outlooks have predicted,” said Ole Hansen, head of commodities strategy. at Saxo Bank. “Demand comes and goes, but supply remains the main concern.”

European sanctions against Russian oil are expected to tighten later this year, while a coordinated six-month energy release agreed by the United States and other developed economies is expected to run its course by the end of the year. . On Thursday, OPEC lowered its forecast for global oil demand growth in 2022 by 260,000 barrels per day (bpd).

He now expects demand to rise by 3.1 million bpd this year. The IEA, meanwhile, raised its demand growth forecast to 2.1 million bpd, citing the shift from gas to oil in power generation.