Markets

NYMEX WTI and DME Oman futures prices lost ground over the week ending June 24 while ICE Brent was flat from the previous Friday as tightness on the supply side was overshadowed by concerns that a global recession could lead to demand destruction.

Crude futures prices were pulled down by concerns that aggressive fiscal tightening by central banks in the US, the UK, and Switzerland could lead to recessions in parts of the world.

Persistent projections that upstream producers as well as refiners will be unable to increase output rapidly enough to meet rising demand helped to push prices higher.

EU leaders finally hammered out an agreement to ban large volumes of Russian oil imports after weeks of negotiations.

The debate in Europe continued over how to get all EU member nations to agree to a bloc-wide ban on Russian oil imports, but sources indicated that the concerned parties were closing in on a deal during the week ending May 27.

Some analysts who are predicting a recession to occur either later this year or next year believe that the likely economic downturn would not be as severe as the 2008 or COVID-19-induced 2020 recessions, meaning that oil demand is likely to remain strong enough to support prices given the ongoing supply tightness.

While the coronavirus situation in China seemed to have improved somewhat over the week ending May 13, projections of struggles for economic growth kept the possibility of weakening demand in some traders' minds.

After negotiations during the week ending May 6 arrived at a plan that would allow certain countries to continue importing Russian crude beyond the end of this year, EU members are expected to agree to the winding-down of Russian imports.

Prices were pressured early in the week ending April 29 by the ongoing coronavirus-related lockdown in Shanghai and the potential demand destruction associated with the personal movement restrictions.

Even though supply tightness got a lot of attention over the week ending April 22 due to the ongoing disruptions to Russian exports related to its attacks on Ukraine as well as new round of blockades that shut in capacity in Libya, demand concerns took the focus.