Oil prices down for the fourth week in a row

(Patria) - On world markets, oil prices fell last week as well, for the fourth week in a row, as traders fear that the slowdown in the growth of the world's largest economies will weaken demand for 'black gold'.

The price of a barrel on the London market fell by 1.5 percent last week, to 74.17 dollars, while on the American market, a barrel fell by 1.8 percent, to 70.04 dollars.

The price drop for the fourth week in a row is a consequence of traders' fears of weakening demand, given that the growth of the world's largest economies is slowing down.

A series of recent data shows that the recovery of the Chinese economy, the world's largest oil importer, is not as fast as expected after the lifting of restrictive COVID measures.

On the other hand, the growth of the American economy, the world's largest oil consumer, has been slowing down for a long time, as the central bank there has been raising interest rates for a year to curb inflation, Hina reports.

Further interest rate hikes are possible, which would further slow down economic activity. Thus, on Friday, Fed Governor Michelle Bowman said that the central bank may need to raise interest rates once more if inflation remains elevated.

The strengthening of the US dollar also negatively affected oil prices, as it makes oil more expensive in countries using other currencies.

The dollar index, which shows the movement of the value of the US dollar against the other six most important world currencies, strengthened by 1.4 percent last week, which is its largest weekly gain since February.

On the other hand, price support comes from analysts' forecasts that the oil supply deficit could deepen in the second half of the year.

Analysts are referring to the Organization of the Petroleum Exporting Countries (OPEC) estimate that demand for its oil in the second half of the year could be 90,000 barrels per day higher than previously forecast.

After falling for four weeks in a row, oil prices are significantly down since the beginning of the year. On the London market, the price of a barrel has fallen by more than 13 percent since the beginning of the year, and on the American market by more than 12 percent.