Home NewsCommodities News Oil prices slump: Oil prices slump as stockpiles and rate hikes stoke demand fears

Oil prices slump: Oil prices slump as stockpiles and rate hikes stoke demand fears

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Oil prices slump: Oil prices slump as stockpiles and rate hikes stoke demand fears


Oil prices fell more than $5 on Thursday after a rise in U.S. gasoline inventories and a European Central Bank rate hike sparked demand concerns, while a rebound in Libyan oil supply eased supply concerns.

Brent crude futures were down $3.88, or 3.6%, at $103.04 a barrel by 1224 GMT, after falling 0.4% in the previous session. U.S. West Texas Intermediate crude futures fell $3.79, or 3.8%, to $96.09 after falling 1.9% on Wednesday.

Both were down more than $5 earlier in the session.

Oil futures traded thin and prices were volatile as traders had to contend with supply crunch from weak energy demand and tight supplies of Russian oil following Russia’s invasion of Ukraine.

The European Central Bank joined many other central banks in raising interest rates on Thursday, focusing on fighting runaway inflation rather than a recession that could weigh on oil demand.

Meanwhile, the Bank of Japan maintained ultra-low interest rates to stimulate stagnant economic growth.

U.S. gasoline inventories rose by 3.5 million barrels last week, far exceeding analysts’ expectations, government data showed on Wednesday. [EIA/S]

“U.S. gasoline demand is struggling to get into top gear during the summer driving season,” said PVM analyst Stephen Brennock.

Libya’s National Oil Company (NOC) said on Wednesday that crude production at several oil fields had resumed after a force majeure on oil exports was lifted last week.

On the gas side, Gazprom resumed supply through the Nord Stream 1 pipeline, which supplies more than a third of Russia’s gas exports to the EU.

However, operator TC Energy said the Keystone pipeline, one of Canada’s main oil export arteries, ran at a lower pace for the third day in a row on Wednesday.

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