Oil prices maintained stability on Thursday as the market assimilated concerns over a potential global economic slowdown and tighter availability of crude oil.
At 0752 GMT, Brent crude futures experienced a slight decline of 20 cents, reaching $76.45 per barrel, following a 0.5% increase the previous day.
Similarly, U.S. West Texas Intermediate crude dropped by 5 cents to settle at $71.74 a barrel. This came after a 2.9% surge in post-holiday trading on Wednesday, catching up with the previous week’s gains in Brent prices.
Market expectations have been shaped by the anticipation of interest rate hikes in the United States and Europe, aimed at curbing persistently high inflation. Meanwhile, concerns about a global recession have heightened due to recent surveys revealing a slowdown in manufacturing and service sector activities in China and Europe.
The U.S. central bank, acting in unity, decided to maintain the current interest rates during its June meeting, providing a temporary pause to assess the necessity of future policy tightening. However, most attendees anticipated that tightening measures would eventually be required.
On the supply front, major oil exporters Saudi Arabia and Russia announced additional production cuts for August. These measures now amount to over 5 million barrels per day (bpd), representing approximately 5% of global oil output.
These cuts, coupled with a larger-than-expected decline in U.S. crude inventories, offered some support to oil prices.
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