WTI Crude oil futures ended the previous week 1.4% lower and closed at $90.77 per bbl, amid increasing concerns of a global economic slowdown. Recession fears continue to exert pressure on energy markets, with Fed minutes signalling a strong commitment to bring down inflation to the 2% target range. On top of that, concerning industrial production figures and further Covid lockdowns in China added to the outlook of a decline in energy demand.

Still, robust EIA inventory data helped oil pare some initial losses. US crude stockpiles sank by 7.06 million barrels in the week ended 12th August, exports rose to a record and gasoline demand climbed to the highest this year. Crude exports rose to a record as European refiners rushed to stock up the supplies ahead of a ban on Russian oil imports. Meanwhile, Americans are driving more as a response to gasoline prices coming off of record highs, pushing demand to the highest this year.  The four week average of US gasoline supplied a proxy for consumption rose to about 9.1 million barrels a day.

Earlier last week, efforts to revive the 2015 nuclear deal that could boost Iranian oil exports by about 1.3 million bpd drove prices to hit six-month lows. MCX Crude oil August futures closed at Rs.7,221 per bbl, down by 1.8%.