Oil prices edged lower on week ending June 17, over rising concerns on inflation-induced demand weakness.
Brent crude was trading at $119.72 per barrel at 1126 GMT on Friday, posting a 1.82% loss from the Monday session that opened at $121.94 a barrel.
American benchmark West Texas Intermediate (WTI) registered at $117.36 per barrel at the same time on Friday, decreasing 2.35% relative to the opening price of $120.19 a barrel on Monday.
Monetary policies of the world economies are getting more aggressive to tame record-high inflation, forcing them to raise interest rates. The US, Brazil, Saudi Arabia, Switzerland and the UK have lined up to increase policy rates.
China’s strict COVID-19 restrictions further cement these concerns as the country is set to ramp up anti-pandemic efforts in Hong Kong to tackle a recent surge in coronavirus cases.
Meanwhile, supply uncertainties amid Russia-Ukraine war and unfolding sanctions on Russian hydrocarbon resources as well as tightening demand-supply gap bring the supply side concerns to the fore.
Output disruptions in Libya, which have almost slashed the country’s production, limits further decreases.
Libyan Oil minister Mohammed Aoun earlier this week said that the country’s oil production was down by 1.1 million barrels daily—from 1.2 million barrels daily earlier this year.
Fading hopes on a possible deal between Iran and the US, which will bring extra barrels online if realized, also added to the supply concerns after the US places new sanctions on Iran also limited the losses.
By Sibel Morrow