WTI, Brent falling on recession concerns

WTI crude futures today are on track to fall by as much as $10/bl, or more than 9pc, from 1 July as concerns over a global economic recession loom over possible demand estimates.

WTI futures traded at $98.13/bl at around 1:30pm ET today and may be on track for the first sub-$100/bl close since 10 May, when it closed at $99.76/bl. There was no Nymex settlement on 4 July because of a US federal holiday. Brent was down by more than 10pc to $101.77/bl.

Weakening macroeconomic indicators are pressuring crude prices. US manufacturing activity slowed in June to its lowest level in two years, with easing demand, tight labor markets and supply chain constraints. US consumer spending rose in May at its slowest pace of the year, a sign Americans are reining in spending amid surging inflation.

Elsewhere, Eurozone manufacturing levels fell for the first time in two years at the end of the second quarter, as new business intakes and export orders declined and business confidence fell to its lowest for 25 months.

Concerns over the macroeconomic outlook have even outweighed concerns over a labor strike at Norway's state-controlled Equinor. The company started a shutdown of its Gudrun, Oseberg South and Oseberg East fields after members of the Lederne union plane a strike starting midnight 5 July. The three affected fields account for 3pc of Norway's total crude output, according to the Norwegian Petroleum Directorate (NPD).

By Sergio Meana