Global oil prices rose last week after four weeks of decline, but trading was uncertain due to the slowing growth of Western economies, which will weaken demand for ‘black gold’.
The price of a barrel on the London market increased by 1.9 percent last week, to $75.58, while on the American market, the barrel rose by 2.3 percent, to $71.69.
Midweek, prices rose due to news that by the end of the week, Democrats and Republicans in the U.S. might reach an agreement on increasing the national debt, so Congress could support that agreement next week.
However, this did not happen by Friday, and on that day, oil prices lost some of their previous gains.
If an agreement is not reached in Congress by June 1, federal authorities will not be able to finance the operations of some government institutions.
On the other hand, prices are supported by traders’ hopes that demand in China will increase by the end of the year due to a faster economic recovery. This should offset the weakness in demand due to the slowing growth of Western economies.
However, the question is how much the growth of Western economies will slow down and whether a recession will be avoided, given that due to high inflation, central banks in Western countries are likely to continue raising interest rates.
Last week, several officials from the U.S. central bank indicated that inflation is not easing quickly enough and that further interest rate hikes are possible.
– The possibility of additional interest rate increases in the U.S. fuels fears of weaker demand – analysts from the National Australia Bank wrote in a market situation overview.
Prices in the negative since the beginning of the year
Despite last week’s increase, oil prices remain significantly down since the beginning of the year, more than 10 percent.
