MELBOURNE, Nov 4 (Reuters) – Oil prices fell in early trading on Friday, extending losses from the previous session on fears that U.S. interest rates could rise more than expected and renewed concerns over the fact that COVID outbreaks will hurt fuel demand in China.
Brent crude futures fell 22 cents, or 0.2%, to $94.45 a barrel at 0025 GMT after falling 1.5% in the previous session. The contract was on course to drop more than 1% for the week.
U.S. West Texas Intermediate (WTI) crude futures fell 27 cents, or 0.3%, to $87.90 a barrel, deepening a 2% loss from the previous session, but falling to finish flat for the week.
Fears of a recession in the United States, the world’s biggest oil consumer, grew on Thursday after Federal Reserve Chairman Jerome Powell said it was “very premature” to consider pausing interest rate hikes. interest rate.
“The specter of further rate hikes has clouded hopes for a recovery in demand,” analysts at ANZ Research said in a note.
Adding to the gloom, the Bank of England warned on Thursday that it believed Britain had entered a recession and the economy may not grow for another two years.
ANZ analysts pointed to signs of weaker demand in Europe and the United States, with people driving less and Amazon warning of lower sales, which could dampen demand for the distillate for its deliveries.
Further hampering the outlook, China stuck to its strict COVID-19 restrictions as cases rose on Thursday to their highest level since August. Earlier in the week, investors believed the world’s biggest oil importer could be moving towards easing restrictions to boost the economy.
With weaker demand in China, Saudi Arabia cut December official selling prices (OSPs) of its flagship Arab light crude oil to Asia by 40 cents, at a premium of $5.45 a barrel per barrel. compared to the Oman/Dubai average.
The reduction was in line with forecasts from trade sources.
Reporting by Sonali Paul in Melbourne; Editing by Kenneth Maxwell
Our standards: The Thomson Reuters Trust Principles.
