Oil prices have faced sustained falls this week as looming recessionary fears in the US continue to undo rises caused by OPEC’s production cut announcement early this month.
Brent sat as low as US$80.19 per barrel on Friday morning, with WTI having sunk to US$76.40 after falling below the US$80 mark on Wednesday.
Hints of recession later this year from the US Federal Reserve continue to feed into oil price declines, according to Hargreaves Lansdown analyst Sophie Lund-Yates.
“The majority of the rally driven by the surprise cut in production by OPEC has all but been erased” as a result, she added.
OPEC+, which accounts for 40% of global oil production, announced a one million barrel-plus output cut in early April, though intended price rises to around US$90 never developed.
Analysts largely blamed the sustained falls on a Wednesday report from the Fed which showed the US economy had stalled in recent weeks as economic uncertainty looms.
Hiring and inflation have slowed, while access to credit is narrowing, the report found.
“This unsettled markets,” ANZ strategist Daniel Hynes said, “magnifying recent concerns that monetary tightening has weakened demand for oil".
Lund-Yates pointed to “elevated” demand from China as “likely to be the biggest source of oil price fluctuations in the short-term”.
Brent and WTI had fallen 5.8% and 6.1% on Monday's prices by Friday afternoon.