New York July 20 2022: Oil prices fell over $2 a barrel on Wednesday before recouping some losses, under pressure from global central bank efforts to limit inflation and ahead of an expected buildup in U.S. crude inventories as fuel demand weakens.
Brent crude prices for September were down $1.81, or 1.69%, at $105.54 a barrel by 1215 GMT, while U.S. West Texas Intermediate (WTI) crude for August slipped $1.62, or 1.55%, to $102.60 per barrel. The WTI contract will expire on Wednesday.
The more active September WTI contract was at $98.97 a barrel, down $1.77.
Oil prices whipsawed in the previous session, caught in a tug-of-war between supply fears caused by Western sanctions on Russia and expectations of economic weakness and reduced demand as central bankers indicated they will raise interest rates to combat inflation.
On Friday, open interest in New York Mercantile Exchange futures fell to its lowest since September 2015 as concerns that the Federal Reserve will keep raising U.S. interest rates led investors to cut their exposure to risky assets.
“People have been switching out of Delta 1 products – just being long the futures or long via the index – into options because of the sharp pullback,” Stephen Innes, managing partner at SPI Asset Management, said in a note.
Adding to bearish sentiment, crude stocks in the United States rose by about 1.9 million barrels for the week ended July 15, according to market sources citing American Petroleum Institute figures on Tuesday.
