Oil drop as traders weigh on tight gasoline market, weak growth

(Bloomberg) – Oil prices fell early in the week as investors weighed on tight-knit markets amid concerns that global growth would slow.

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West Texas Intermediate slipped below $ 110 a barrel in early Asian trading after four consecutive weekly gains, the longest run of its kind since February. Gasoline and diesel prices have risen to record highs before the start of the US summer driving season, which begins in about a week.

Over the weekend, Saudi Arabia indicated that it would continue to support Russia’s role in the OPEC + producer group, undermining US-led efforts to isolate Moscow from invading Ukraine, the Financial Times reported. Saudi Arabia was “hoping for a deal with OPEC +, including Russia,” Energy Minister Prince Abdul Aziz bin Salman told the newspaper.

Oil prices have risen this year due to rising demand and a complex global downturn from Russia’s invasion. Rising energy costs have contributed to massive inflation, prompted central banks to raise rates and slowed investor concerns. At the same time, China has imposed multiple crippled lockdowns to stem the Kovid-19 outbreak, hitting Asia’s largest economy.

According to Bloomberg Intelligence, Beijing’s efforts to thwart Covid-19 could push oil prices around $ 110 a barrel in light of China’s flagship demand for economic growth. Bloomberg Economics lowered its full-year China growth forecast from 5.7% to 2%.

While prices have shifted to volatile trade, the Organization of Petroleum Exporting Countries and its allies, including Russia, are recovering at a modest rate of production that was cut off during the epidemic. So far, the alliance has resisted U.S. requests for more rapid recovery.

Oil markets remain in recession, a bullish pattern characterized by near-term prices of long-term upside transactions. Brent’s prompt spread – the difference between the two closest deals – was ওয়ার 2.54 per barrel in backwards, up from $ 2.13 a barrel a week ago.

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