By Adedapo Adesanya
The crude oil market settled lower for a fifth session on Thursday as concerns that global economic slowdowns would slash fuel demand outweighed disruptions.
Brent crude lost 1.3 per cent or $1.02 to trade at $76.15 a barrel, while the United States West Texas Intermediate (WTI) crude depreciated by 0.8 per cent or 55 cents to close at $71.46 a barrel.
Traders shrugged off the closure of a major Canada-to-US crude pipeline on Thursday as Canada’s TC Energy said it closed the tap to its 622,000 barrel-per-day Keystone pipeline, which is the primary line shipping heavy Canadian crude from Alberta to the US Midwest and Gulf Coast. The line has had several spills since it began operating in 2010.
Prices rose after the company announced the closure, but the rally disappeared as analysts noted that the US Gulf is likely to have enough inventory to handle short-term outages.
The energy markets are weighed down by fears of an economic slowdown, weakening fuel demand amid the prospect of more US interest rate hikes.
This is coming as US Federal Reserve policymakers meet next week and are likely to announce a 50-basis-point hike in the US central bank’s lending rate while indicating a slower pace of future rate hikes.
Both Brent and US crude hit 2022 lows on Wednesday, unwinding all the gains made after Russia’s invasion of Ukraine exacerbated the worst global energy supply crisis in decades and sent oil close to its all-time high of $147.
The premise has swallowed hopes that China’s easing of its anti-COVID-19 measures will help restore global supply chains and curb inflation.
China’s shift in policy, announced on Wednesday, would allow the country’s economy to pick up the pace, Premier Li Keqiang said on Thursday.
China on Wednesday detailed the most sweeping changes to its strict anti-COVID regime since the pandemic began. Projections from analysts, however, warned that a significant economic reopening is likely months away.
Western officials were in talks with Turkish counterparts to resolve the tanker queues after the Group of Seven (G7) and European Union rolled out new restrictions aimed at Russian oil exports.
Russian oil output could fall by 500,000 to 1 million barrels per day early in 2023 due to the European Union ban on seaborne imports, which started on Monday.
