International oil price slips under $100 per barrel Potential Global Recession | Brave Business
International oil price slips Potential Global Recession
Brent crude futures slid 94 cents, or 0.9%, to $99.75 a barrel after falling to a session low of $98.50 earlier in the day.
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| Source - India Today |
Brent crude futures fell for a third session on Thursday, falling below $100 a barrel as fears of a worldwide recession fueled concerns about oil demand.
Brent crude futures slid 94 cents, or 0.9%, to $99.75 a barrel after falling to a session low of $98.50 earlier in the day. WTI crude futures fell 79 cents, or 0.8%, to $97.74 a barrel.
On Wednesday, both benchmarks closed at their lowest levels since April 11. The falls follow a sharp drop on Tuesday, despite tight global supplies. WTI fell 8%, while Brent fell 9%, resulting in a $10.73 decline, the third most for the contract since it began trading in 1988.
"With little new information regarding production or consumption, oil is being decimated," said Stephen Innes, managing partner of SPI Asset Management.
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"However, with commodity traders becoming increasingly risk-averse due to rising demand and persistently hawkish (US) Fed policy concerns, the recessionary headline risk hangs like an anvil around the market's neck."
Oil prices have fallen along with other commodities such as metals and palm oil as central banks around the world boosted interest rates to combat inflation, fueling fears of a global recession that would decrease commodity demand.
"It appears that the market is starting to price in that scenario," ING's head of commodity research Warren Patterson said, referring to a recession.
However, he said that it is difficult to be very gloomy on oil prices because the Brent monthly spreads remain huge, signalling limited supplies. In a backwardated market, immediate prices are greater than future months' prices.
Traders are keeping an eye on the Caspian Pipeline Consortium (CPC), which has been ordered by a Russian court to halt operations for 30 days. As of Wednesday morning, exports at CPC, which handles around 1% of world oil supplies, were still flowing.
Furthermore, investors were anticipating US government statistics due on Thursday, which will give insight on the health of domestic oil and fuel inventories.
According to market sources, US oil stockpiles increased by around 3.8 million barrels last week, according to industry statistics released on Wednesday. Gasoline inventories decreased by 1.8 million barrels, while distillate inventories decreased by around 635,000 barrels.
Content Source:- https://www.indiatoday.in/business/story/international-oil-price-slips-under-100-per-barrel-1972813-2022-07-07
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