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Target profit slumps as discounts fail to spur spending by inflation-weary consumers

Oil falls as U.S. inflation data surges, China imposes lockdowns

Commodities Jun 10, 2022 04:11PM ET
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© Reuters. An aerial view shows oil stockpiling facilities in unidentified location, South Korea, in this handout picture taken on July 14, 2005. Picture taken on July 14, 2005. Korea National Oil Corp/Handout via REUTERS/File Photo

By Stephanie Kelly

NEW YORK (Reuters) -Oil prices fell on Friday, after U.S. consumer prices rose more than expected and China imposed new COVID-19 lockdown measures.

Brent crude fell $1.06 to settle at $122.01 a barrel. U.S. West Texas Intermediate crude fell 84 cents to settle at $120.67 a barrel.

Both benchmarks still posted weekly gains, 1.9% for Brent and 1.5% for WTI.

For the day, oil prices sank along with Wall Street stocks after news that U.S. consumer prices accelerated in May. Gasoline prices have hit a record high and the cost of food has soared, leading to the largest annual increase in about 40 years. That raises expectations that the Federal Reserve will tighten policy more aggressively.

"The concern is that could be a forward indicator of consumer habits and even though gasoline demand is strong now, it's a sign in the future that if gasoline prices don't stabilize then consumers will be cutting back," said Phil Flynn, analyst at Price Futures.

In another red flag for demand, Shanghai and Beijing went back on COVID alert on Thursday. Parts of Shanghai imposed new lockdown restrictions and the city announced a round of mass testing for millions of residents.

China's crude oil imports in May were up nearly 12% from a year earlier, when they were low.

"This does not indicate that oil demand is picking up. Instead, China is likely to have acted opportunistically, buying crude oil from Russia at a significantly lower price than the global market level in order to replenish its stocks," Commerzbank (ETR:CBKG) analyst Carsten Fritsch said.

Oil had risen more than $1 earlier in the session from fears of a potential disruption in supplies in Europe and Africa.

Norway's oil output could be reduced if workers go on strike on Sunday, the Norwegian Oil and Gas Association (NOG) said.

Some 845 of roughly 7,500 employees on offshore platforms plan to strike from June 12 if annual pay negotiations fail.

Oil output at Libya's Sarir field has been reduced after the ports of Ras Lanuf and Es Sider were closed and as a group threatened to close Hariga port, two oil engineers at the field said.

In U.S. supply, the U.S. oil rig count, an indication of future supply, rose six to 580 this week, their highest since March 2020.

Prospects are receding for reaching a nuclear deal with Iran and lifting U.S. sanctions on the Iranian energy sector.

Iran on Thursday dealt a near-fatal blow to chances of reviving the nuclear deal as it began removing essentially all the International Atomic Energy Agency monitoring equipment installed under the deal, IAEA chief Rafael Grossi said.

Money managers cut their net long U.S. crude futures and options positions by 1,674 contracts to 284,171 in the week to June 7, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Oil falls as U.S. inflation data surges, China imposes lockdowns
 

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Comments (6)
William Smith
William Smith Jun 10, 2022 7:08AM ET
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Amazing that one of Biden's first moves after taking office was to give in to the green movements pressure and Democrat leftists demands and ban the Keystone pipeline and cancelling American drilling leases, making the US once again prisoners to OPEC, Russia and the middle east for oil.  Those moves also put pricing back in OPEC'S  hands.  At the same time kicking Canada in the groin by telling them we dont want their oil.  Those actions are largely responsible for the current price of oil irregardless of the Russian/Ukraine war.  The press uses the war in their disinformation campaign but prices were heading way up long before it started because of Biden's anti oil/anti American executive orders.  That move was a sad  day for America and the free world.
Jeff Roos
Jeff Roos Jun 10, 2022 7:08AM ET
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Just a rambling talking point with no actionable info behind ithttps://www.politifact.com/factchecks/2022/mar/09/joe-biden/fact-checking-bidens-claim-there-are-9000-unused-o/
Ricardo Diogo
Rcd72 Jun 10, 2022 7:08AM ET
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maybe you could question if 120billion of usd/month , FED money printing frenzy ... in the 2 years it lasted, it is like 10%of ALL USD printed since 1880, to buy financial ********is the reason for the silly valuation of energy metals lumber....
First Last
First Last Jun 10, 2022 7:08AM ET
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Jeff Roos   And U.S. Baker Hughes Rig Counts reported earlier today show increase again.
First Last
First Last Jun 10, 2022 7:08AM ET
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Part of reason Keystone pipeline was canceled is because Trump played it fast and loose with approving it, giving rise to many lawsuits.  And if not cancelled, it would not be built and transporting anything today, so cancellation hasn't affected oil price.
Todd Gray
Todd Gray Jun 10, 2022 12:37AM ET
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isn't china sitting on an ocean of oil reserves?
Casador Del Oso
Casador Del Oso Jun 09, 2022 11:07PM ET
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oil still over 120 bbl. not much of a fall.
Steven Jacobs
Steven Jacobs Jun 09, 2022 10:34PM ET
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Just “reasons” to take all your hard earned money
Making Easy Money
Making Easy Money Jun 09, 2022 10:10PM ET
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time to sell oil
Crypto Current
Crypto Current Jun 09, 2022 10:10PM ET
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Time to buy oil: EGY and Panoro Energy
Patryk Sl
Patryk Sl Jun 09, 2022 10:04PM ET
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Another bs "reason". As if Shanghai really matters that much for oil consumption...
Julian Goh
Julian Goh Jun 09, 2022 10:04PM ET
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mkt is in chaos state. any news blowing across the mkt create panicking reaction.
 
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