Crude oil at $78 a barrel falls to lowest this year
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The price of global crude oil edged to its lowest since the start of the year in volatile trading, after US government data showed an unexpectedly large build in fuel stocks, feeding fears about demand in a market already spooked by an uncertain economy.
The price for Brent crude tumbled $1.20 to $78.15 a barrel, after earlier hitting its lowest level in over 11 months.
Traders in crude are also assessing the level of US fuel stocks, the prospects for growth in China after it made sweeping changes to its anti-Covid regime since the pandemic began, as well as queues of 20 oil tankers off the Turkey coast from Russia's Black Sea ports.
"There's still tons of uncertainty in the markets today," said Rystad Energy senior vice-president Claudio Galimberti, adding crude production in Russia may not drop as much as expected earlier.
Meanwhile, recession fears drove European shares lower for a fourth straight session, but losses were limited by gains in healthcare stocks.
The continent's Stoxx-600 index took its cue from Wall Street declines overnight after big US banks cautioned of a likely recession next year.
"There is a sense of nervousness and jitteriness in the markets today," said Interactive Investor head of investment Victoria Scholar, citing more volatility as the year-end approaches. She said:
A stock rally driven by hopes of a less aggressive US Federal Reserve has been tested in recent days after strong US economic data fueled fears that the central bank could keep hiking interest rates for longer.
Markets now await a slew of interest rate decisions, including from the Fed and European Central Bank next week, for further clues on the direction of monetary policy.
"With China starting to moderate their Covid restrictions, there is a hope that the economic suffering in the West will be counteracted by a Asia-led rebound in growth,” Joshua Mahony at IG said.
On the pan-continent Stoxx-600 index, energy stocks led declines, falling 2% as crude prices slid after the US data showed an unexpectedly large build in fuel stocks, feeding fears about demand in a market already spooked by an uncertain economy.
Banks fell for their third straight session, also weighing on the Stoxx-600.
Eurozone government bond yields hit fresh multi-week lows amid conflicting signals about when inflation will peak. A survey showed rising inflation expectations for the year ahead, but expectations for three years ahead were unchanged at 3%, well above the ECB's 2% target.
Healthcare shares rose, with GSK and Sanofi jumping, boosting the index after the drugmakers.
Airbus fell 2.2% as the world's largest planemaker abandoned a numerical forecast for jet deliveries and a date for its key production goal.
Eurozone gross domestic product grew slightly more than initial estimates, Eurostat data showed, with household spending and business investment propping up the economy.
- Additional reporting from Bloomberg and Reuters.