Friday’s oil prices swing followed a turbulent week as worries about a global economic downturn lingered.
Following a flat day on Thursday, West Texas Intermediate crude oil prices were near $84 per barrel in early trading on Friday. Crude oil prices have been consistently volatile as investors weigh concerns about a potential economic downturn against indications of a tightening oil market. Added difficulties stem from the robust dollar.
Since early June, oil’s price has fallen by a third as fears about a slowing economy and central banks’ aggressive monetary policy to tame inflation have weighed on investor sentiment. With OPEC+ reducing output and the EU imposing sanctions on Russian supplies, though, the market is facing a period of supply uncertainty in the coming months.
The market is beginning to feel the effects of the impending sanctions on Russia, which will extend to petroleum products beginning early in the new year.
There is still a lack of clarity on demand in China after President Xi Jinping’s assurances on Sunday that Beijing would maintain its Covid Zero policy, despite officials are said to be debating whether to cut quarantine for inbound travelers.