Oil is recovering after a 3-day drop in prices, and demand concerns persist

Oil prices rose on Thursday, but could not recover from a decline of more than 9 percent in the past three days, as concerns about demand among major consumers outweighed signs that the United States may stop raising interest rates.

Brent crude futures rose 50 cents, or 0.7%, to $72.83 a barrel by 0639 GMT, after falling more than nine percent and dropping earlier in the day to $71.28.

US West Texas Intermediate crude also rose 28 cents, or 0.4 percent, to $68.88. This crude fell almost 11 percent from Friday until Wednesday’s close. It fell earlier on Thursday to $63.64, its lowest level since December 2, 2021.

Prices fell this week amid concerns about the US economy, signs of weak manufacturing growth in China, the world’s largest oil importer, and after the Federal Reserve on Wednesday raised interest rates to their highest levels since 2007, which could limit economic growth in the long run. short.

Although the Federal Reserve raised interest rates by a quarter of a percentage point as expected, it signaled the possibility of holding further increases to give officials time to assess the implications of recent bank failures and wait for clarification of the dispute over raising the US debt ceiling.

The collapse of the third US bank since March, due to the inability of those banks to manage high interest rates, affected the financial markets in general.

The OPEC + group, which includes the Organization of the Petroleum Exporting Countries and allies including Russia, began voluntary production cuts of about 1.16 million barrels per day since the beginning of this month. These cuts are expected to support the market as it moves through the summer peak demand period.

Chinese demand concerns continue to overshadow the market, especially after a survey of the private sector on Thursday showed that factory activity fell unexpectedly in April due to weak domestic demand.