Oil prices fell again below $98 a barrel

Baghdad-INA 

 Oil prices fell by about two percent to reach below $98, after exceeding $ 100 earlier today, Friday, due to expectations that the Gulf of Mexico supply disruptions in the United States will be short-lived, while recession fears cast a shadow on demand expectations.

By 15:10 GMT, Brent crude futures fell $1.83, or 1.8 percent, to $97.77 a barrel. West Texas Intermediate crude futures fell $2.16, or 2.3 percent, to $92.18 a barrel. Both crudes rose more than two percent on Thursday.

Brent crude is heading for a 3 percent gain this week, recoupling some losses last week, when it plunged 14 percent in its biggest weekly loss since April 2020, amid fears that rising inflation and raising interest rates will hurt economic growth and fuel demand. West Texas Intermediate crude is also heading for a gain of 3.7 percent.

But uncertainty limited price gains as the market absorbed the opposing views of the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency on the demand outlook.

A Louisiana port official said crews are expected to replace a damaged section of the pipeline by the end of Friday, which will allow production to resume on seven US offshore oil platforms in the Gulf of Mexico.
Shell, the largest oil producer in the Gulf of Mexico, said on Thursday it had halted production at three deep-water platforms in the region. The three platforms produce up to 410,000 barrels of oil per day in total.
The market also absorbed the discrepancy between OPEC and the International Energy Agency in their forecasts for demand.

“We are seeing an economic slowdown, but it is not clear if it is a significant slowdown as some recent forecasts suggest,” said Ole Hansen, director of commodity strategy at Saxo Bank.
"Demand moves like tides, but supply remains the main concern," he added.

European sanctions on Russian oil are due to be tightened later this year, while a coordinated six-month plan between the United States and other advanced economies to withdraw their energy stocks is due to expire by the end of the year.

On Thursday, OPEC cut its forecast for global oil demand growth in 2022 by 260,000 barrels per day, expecting demand to increase by 3.1 million barrels per day this year.