Oil prices fell in a break after three consecutive uptrends, as worries about the global economy eased, while limited supply “picked up” the losses.
Brent crude for August delivery fell 98 cents, or 0.8 percent, to $ 117 a barrel, while the West Texas Intermediate fell 0.6 percent, or 62 cents, to $ 111.14 a barrel.
Both contracts rose more than 2% on Tuesday as concerns about limited supplies due to Western sanctions on Russia offset concerns that demand could slow down in a possible future recession.
“The market is caught between the deteriorating macroeconomic scenario and the emerging threat of recession, which contrasts with the strongest fundamental oil market in decades, perhaps for the first time,” said RBC Capital analysts.
Saudi Arabia and the United Arab Emirates are considered the only two OPEC members with excess production capacity to make up for lost Russian supplies.
However, comments by the UAE Minister of Energy and French President Macron this week left little room for these countries to further increase production.
“Investors have adjusted their position, but remain optimistic that Saudi Arabia and the United Arab Emirates will not be able to significantly increase output to meet demand recovery due to rising fuel prices. of aircraft “, stressed a Nissan Securities analyst.
“Oil prices are likely to remain above $ 110 a barrel, also due to concerns about possible supply disruptions due to hurricanes as summer begins in the US,” he added.
Analysts also warned that political unrest in Ecuador and Libya could further reduce oil supplies.