Oil is headed for its worst weekly drop since February on fears of a US slowdown

  • Brent, WTI fell more than 5% this week
  • All eyes on American jobs report on Friday
  • Fear of interest rate increases in the US dominates the mood on the market

March 10 (Reuters) – Oil fell for a fourth session on Friday, heading for its biggest weekly loss in five weeks on worries about the prospect of steep U.S. interest rate hikes that would slow growth and hit fuel demand.

Brent dipped 48 cents, or 0.6, to $81.11 a barrel. barrel at 0434 GMT. U.S. West Texas Intermediate (WTI) crude fell 60 cents, or 0.8%, to $75.12 a barrel. barrel.

Expectations of ongoing rate hikes in the world’s biggest economy and in Europe have clouded the global growth outlook, driving both crude benchmarks down more than 5.5% so far this week, their worst declines since early February.

US Federal Reserve Chairman Jerome Powell has warned of higher and potentially faster rate hikes, saying the Fed was wrong to initially think inflation was “transient” and was surprised by the strength of the labor market.

The labor market is still seen as tight, even after the number of Americans filing new claims for unemployment benefits rose by the most in five months last week.

“Investors have become increasingly cautious,” analysts at Haitong Futures said in a note.

Latest updates

See 2 more stories

The prospect that the US jobs report on Friday will lead to faster rate hikes has already triggered steep falls in financial markets, and analysts expect oil prices could also be under pressure.

“All eyes are on US data due later today, the key guide before the Fed triggers a rate hike,” Haitong analysts said.

On the supply side, the U.S. was reported to have privately urged some commodity traders to drop concerns about the Russian oil shipping price cap in a bid to bolster supply, suggesting more Russian oil could flow into the market.

Investors are closely monitoring export cuts from Russia, which decided to reduce oil production by 500,000 barrels per day in March.

Reuters reported this week that Russia plans to cut oil exports and transit from its western ports in March by 10% on a daily basis from February.

Reporting by Sudarshan Varadhan and Muyu Xu in Singapore; Editing by Lincoln Feast and Sonali Paul

Our standards: Thomson Reuters Trust Principles.

sudarshan varadhan

Thomson Reuters

Sudarshan currently reports on the evolving energy landscape in Asia as the region tries to strike a balance between ensuring reliable electricity supply and combating climate change. In his previous avatar, he reported on sanctions-era global trade, human rights abuses, labor movements, environmental crimes and natural disasters in India for six years. During his nine years as a Reuters correspondent, he has tried to give small-town issues a global perspective. Contact: +91 9810393152

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top
%d bloggers like this: