The global crude benchmark fell as much as 2.4 per cent, touching its lowest level since March, while West Texas Intermediate also fell. Wider markets were softer on Thursday, while the dollar resumed its advance, weakening commodities priced in the currency. Traders have shifted toward expectations of an historic one percentage-point Fed interest rate hike later this month.
Time spreads are signaling scarce supply, however and Goldman Sachs Group Inc. said the market is “screaming” tightness. The bank said a large selloff this week has been driven by low liquidity and technical factors, with Brent down more than 20 per cent from its high in June. President Joe Biden landed in the Middle East on Wednesday just as a report showed inflation soared to a four-decade high last month, reflecting higher costs including gasoline, which are a central issue in US elections. High US gasoline prices could be starting to taking their toll on consumption, with demand falling last week to the lowest level for this time of the year since 1996.
“Concerns about the impact of high inflation on economic growth and oil demand are visibly growing,” said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd. “Outright prices and the structure are out of sync.”Brent for September settlement lost 2.4 per cent to US$97.23 a barrel at 10:04 a.m. in LondonUS gasoline demand fell last week to 8.06 million barrels a day, also below the same week in 2020, according to the Energy Information Administration.
Renewed Covid-19 outbreaks in China have also weighed on the outlook for oil demand. Shanghai’s flareup appears to be easing, but other regions are being locked down and facing restrictions to curb the spread of the virus. Nationwide, 292 cases were recorded on Wednesday.
Yet the price at the pumps will not go down as all they care about is profits screw the people. No policing at all. Drive interest rates up and economy goes for shit as big companies do whatever they want.
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