Oil prices are under downward pressure during the first trading week

2023-08-28 13:00:02

oil

Oil prices witnessed downward pressures in the first trading week, today, Monday; Amid increasing expectations about an increase in the oil supply in the markets during the coming period, in addition to fears of weak US demand for crude oil, in conjunction with the statements of US Federal Reserve Governor Powell at the Jackson Hole Forum regarding the possibility of tightening monetary policy more during the coming period, and this may weaken economic growth.

During the trading of standard oil contracts today, spot Brent crude contracts recorded a slight decrease by 0.27% and reached $83.81 a barrel, in addition to a decline in spot contracts for West Texas Intermediate crude by 0.16%, to record $79.83 a barrel.

Crude oil prices recorded a slight decline during Monday’s trading; Due to the improvement in the markets, there is a possibility of an increase in Russia’s oil supplies in the markets during the coming period, in light of the slight increase in Russia’s exports – which is considered one of the world’s largest oil producers – during the month of August, despite Moscow’s pledge to reduce crude oil exports. In this regard; Russian data revealed that total crude oil exports amounted to 7.7 million tons in August, compared to 7.5 million tons in July, which caused increasing downward pressure on oil prices.

Also, oil prices were subjected to downward pressure on the sidelines of the first trading week, affected by the growing speculation about the possibility of slowing economic growth in the United States, which is considered one of the largest consumers of crude oil globally, which in turn will negatively affect the American demand for crude oil, after the statements of the US Federal Reserve Governor. Jerome Powell’s hawkishness about raising interest rates while at the Jackson Hole Forum.

In this context, Jerome Powell stated that the US Federal Reserve is ready to raise interest rates more if appropriate, adding that the current monetary policy is constrained, but the US Federal Reserve cannot ascertain the appropriate interest rate level, and these statements reinforced expectations of raising US interest rates again, which may It negatively affects the country’s economic growth, and then increases the possibility of weak US demand for crude oil, which increases pressure on oil prices.

On the other hand, oil prices received some support that prevented their collapse in terms of trading today, as a result of China – the second largest importer of crude oil in the world – taking new steps to support the Chinese stock market, in a way that enhances investor confidence and activates transactions within the stock and capital markets. This step comes Within a series of stimulus measures that China is taking to support economic growth in the country, which in turn may lead to a recovery in Chinese demand for crude oil.