Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Oil Slumps Further As China-Taiwan Tensions, Growth Fears Bite

Commodities Aug 05, 2022 10:20
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
LCO
+0.43%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CL
+0.46%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Ambar Warrick

Investing.com-- Oil prices tumbled further below key levels on Friday, and were set for large weekly losses as an escalation in China-Taiwan tensions and an interest rate hike by the Bank of England painted a dim picture for crude demand.

As of 2011 ET (0011 GMT), Crude Oil WTI Futures traded down 0.3% at $88.30 a barrel, their weakest level since early February, before Russia’s invasion of Ukraine.

Brent oil futures rose 0.5% to $93.81 a barrel. Both indicators had slumped over 3% on Thursday, and were headed for weekly losses of between 12% and 17%.

Crude prices plummeted on Thursday after China fired missiles around Taiwan, escalating tensions triggered by U.S. House of Representatives Speaker Nancy Pelosi’s visit to Taipei.

The move significantly worsens sentiment towards Asia’s largest economies, and is likely to dent other asset prices in the region.

Additionally, the Bank of England raised interest rates and signaled more measures to combat inflation, suggesting that the UK is set for economic ructions in the near term.

Sharp monetary policy tightening in the developed world is driving up concerns over a coming recession, as most countries struggle with high inflation.

Losses in oil prices this week were triggered by a swathe of weak manufacturing data, which raised concerns over slowing demand.

A surprise jump in weekly U.S. crude stockpiles also pointed to a potential supply glut in the world's largest oil consumer.

Against this backdrop, the Organization of Petroleum Exporting Countries and allies (OPEC+) rolled out its smallest ever supply hike, indicating a dour outlook for demand.

Still, a brewing energy crisis in Europe could help keep oil prices underpinned, even as global demand drops. The bloc is struggling to wean away from Russian-supplied oil and gas over Moscow's invasion of Ukraine.

The fall in oil prices also provides some relief to import-heavy countries struggling with inflation driven by high fuel prices.

Focus is now on U.S. nonfarm payrolls data, due later in the day, which will provide more clues on the world's largest economy.

Oil Slumps Further As China-Taiwan Tensions, Growth Fears Bite
 

Related Articles

Oil rises towards $90 as OPEC+ considers output cut
Oil rises towards $90 as OPEC+ considers output cut By Reuters - Sep 29, 2022 3

By Ahmad Ghaddar LONDON (Reuters) -Oil prices firmed on Thursday, erasing earlier losses, on indications that OPEC+ might cut output, though a stronger dollar and weak economic...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email