London (Archyde.com)
Oil prices fell more than ten dollars a barrel during trading yesterday, as fears about a possible global economic recession that would reduce demand for crude overshadowed concerns about supply disruptions.
Brent crude contracts fell $10.77, or 9.5 percent, to $102.73 a barrel by 1543 GMT. US West Texas Intermediate crude contracts fell $9.30, or 8.6 percent, to $99.13 a barrel.
Investors are increasingly concerned about demand in light of a broad tightening of global financial conditions, as the US Federal Reserve combats inflation by rapidly raising interest rates.
On Tuesday, the Reserve Bank of Australia raised interest rates for a third month, pointing to further increases, as it sought to contain rising inflation even with the risk of deflation.
Oil prices continue to be supported by concerns about supplies, as a result of Western sanctions imposed on shipments from Russia due to the conflict in Ukraine, as well as concerns about the ability of the main oil producers in the Middle East to increase production, as well as the current labor disputes in Norway.
The union that leads industrial action in Norway told Archyde.com that workers in the maritime sector have started a strike that will lead to a reduction in oil and gas production.
Norway’s oil producer Equinor said the strike is expected to cut oil and gas production by about 89,000 barrels of oil equivalent per day, from which up to 27,000 barrels per day of gas are released. According to the forecasts of Norway’s Oil and Gas Authority on Sunday, oil production is expected to drop to as much as 130,000 barrels per day, as of Wednesday.