Oil plunges, but heads for its biggest weekly gain since early ‎October

Oil prices fell today, Friday, as the market evaluates the repercussions of raising central banks interest rates, but oil is about to achieve the largest weekly gain in ten weeks, amid fears of supply disruptions and hopes for a recovery in Chinese demand.

By 0728 GMT, Brent crude futures were down 14 cents, or 0.2 percent, at $81.07 a barrel. West Texas Intermediate crude futures fell 22 cents, or 0.3 percent, to $75.89 a barrel.

According to “Reuters”, the two benchmarks fell 2 percent in the previous session, with the rise of the dollar and the central banks in Europe raising interest rates.

“More tightening monetary policy is already having an impact on industrial activity,” analysts from ANZ Research said in a note on Friday. The prospect of further tightening following comments from policymakers weighed on sentiment

The Federal Reserve (the US central bank) has signaled that it will raise interest rates further next year, even as the economy slides toward a potential recession.

However, the two benchmarks are heading towards recording the largest weekly gain since early October, with sentiment supported by tight supply after the closure of T.C. Canadian Energy Keystone pipeline after the leak and thanks to the expectation of increased demand in 2023.

The International Energy Agency expects Chinese demand to recover next year, after its contraction in 2022, to 400,000 barrels per day. The agency raised its forecast for oil demand growth in 2023 to 1.7 million barrels per day.

On Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) announced its commitment to its forecast for global demand growth of 2.55 million barrels per day (bpd) this year and 2.25 million bpd in 2023 after multiple cuts, saying that although the economic slowdown was “quite clear” the There is a potential rise stemming from, inter alia, the easing of the zer- Covid policy in China.