In a downward trend in oil prices, prices were weighed down by concerns about tight supplies in the United States, the world's largest oil consumer, as well as a possible recession.
As of 1352 GMT, Brent crude oil was down 55 cents, or 0.63%, to $86.78 a barrel. The West Texas Intermediate (WTI) crude oil price in the United States fell 46 cents to $82.80 a barrel, or 0.55%.
There was a 2% rise in both Brent and WTI prices on Wednesday, reaching their highest in more than a month as lower U.S. inflation boosted hopes that the U.S. Federal Reserve will stop raising interest rates in the near future.
It was, however, revealed in the minutes of the last Federal Reserve policy meeting that the stress in the financial sector was likely to tip the economy into recession, weakening the demand for oil in the United States.
There are downside risks to the summer oil demand, according to a report released by the Organization of the Petroleum Exporting Countries (OPEC) on Thursday. OPEC, however, has kept its outlook for the growth of global oil demand in 2023 unchanged.
Indicators of economic growth are being closely monitored by the market," which Tamas Varga, an oil broker at PVM, described as fragile.
"It is possible for the inflationary pressure to rise again quite easily," Varga said.
In the wake of the shock move by OPEC and its allies, collectively known as OPEC+, to cut oil output further, the market is still reeling from the shock move.
There is an expectation that the move will contribute to oil prices rising in the second half of the year as a result of tightening supply. This is according to the executive director of the International Energy Agency.
Nevertheless, the International Monetary Fund highlighted on Tuesday the potential risks this poses to the growth of the global economy. Pierre-Olivier Gourinchas, the chief economist at the International Monetary Fund (IMF), has said that when the price of oil rises by 10%, the IMF models predict a reduction of 0.1 percentage points in growth and a rise of 0.3 percentage points in inflation.
In a market reaction on Wednesday, the market shrugged off a slight rise in U.S. crude oil stocks, a move that was attributed to a release of oil from the U.S. emergency reserve and a drop in exports at the start of the month.
U.S. Energy Secretary Jennifer Granholm told reporters on Wednesday that the Biden administration expects to refill the U.S. Strategic Petroleum Reserve soon, adding that she hopes to do so at a lower oil price.
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