WTI for December delivery fell 3.8% to $78.58 a barrel and the barrel of Brent for delivery in January 2023 fell 3.6% to $86.53 a barrel. Both benchmarks are headed for a second weekly loss.
China, which sources said is trying to curb crude imports from some exporters, has seen COVID-19 cases rise, while hopes that aggressive US rate hikes will ease have been dampened by comments from some Fed officials this week.
“As it stands, drivers of bullish prices are in short supply,” said Stephen Brennock of the PVM oil brokerage. “However, with the EU embargo on Russian crude less than three weeks away, oil prices could still end the year with a bang.”
Concerns about the recession dominated this week, even as the European Union’s December 5 ban on Russian crude is imminent to take effect and at a time when the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, are tightening supply.
“On the demand side, there is concern about the economic slowdown,” said Naeem Aslam of Avatrade. “The path of least resistance appears skewed to the downside.”