May 20, 2022 01:07AM ET
By: AnalysisWatch
Oil prices fell on Friday as investors worried that a slowdown in global economic growth and tighter monetary policy by central banks could limit the recovery in fuel demand.
Brent oil futures for July fell 63 cents, or 0.56 percent, to $111.41 a barrel at 0432 GMT, while West Texas Intermediate (WTI) crude for June was down $1.36, or 1.21 percent, to $110.85 at the end of the session.
The July WTI contract, the most traded, fell 0.82 percent to $108.99 a barrel.
The International Monetary Fund (IMF) warned Asian economies to be wary of risks of a relapse into monetary tightening.
The Bank of Japan's policy is at odds with the global trend towards monetary tightening, while central banks in the US, UK and Australia have recently raised interest rates.
Crude oil gains were limited this week, as Brent and WTI prices fluctuated mostly within a range due to demand uncertainty. Investors worried about rising inflation and tighter central bank measures reduced their exposure to risky assets.
Open interest on WTI futures fell to 1.722 million contracts on 18 May, the lowest level since July 2016.
In the US, Americans resumed getting behind the wheel despite rising fuel prices, according to the Federal Highway Administration's Vehicle Miles Traveled report.
On the gasoline supply front, S-Oil, South Korea's third-largest refinery, halted production of its No. 2 alkylation plant and related processes at its Wonsan refinery due to an explosion.
The production shutdown following Thursday night's explosion, which killed one person, is expected to have an impact on Asia's already limited gasoline supplies.
Citi analysts predict that S-Oil's gasoline production will be 'severely' impacted in the short term, although the company may purchase leases to maintain production.
Iranian oil exports to China have fallen sharply since the start of the war in Ukraine, as Beijing prefers heavily discounted Russian barrels. This has left nearly 40 million barrels of Iranian oil stored in tankers at sea in Asia, waiting for buyers.
Comentarios