Economic Concerns Pushing Oil Pricing Downward
August 19, 2022
Consulting firm BCA said EU embargoes on Russian crude oil will tighten supplies by 1.6 million bpd this year and 2.0 million bpd net year. Due to tight oil supplies, BCA expects Brent crude oil to rise to $119 by year end. However, Russia is forecasting rising oil output and exports until the end of 2025. Russian discounted sales to China and India have increased dramatically this year.
China has issued its first national drought alert of the year as authorities battle forest fires, and they mobilize teams to protect crops from scorching temperatures across the Yangtze River basin.
If WTI crude oil can managed to close down today it will be another weekly decline and keep oil in its current downtrend. The concerns about an economic downturn have been more persistent than the low inventories and improving demand outlook and are currently keeping energy prices soft.
US home sales were down in July for the sixth month in a row as higher interest rates and home prices have pushed buyer out of the market.
The big jump in crude exports in this week’s inventory report helped support the run higher in crude oil yesterday. It has also been said that diesel exports have been good as well. But recession fears have been stronger than the bullish items here lately.