Started by PocketOption, Oct 11, 2022, 02:01 am
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The five-day winning streak for oil prices ended on Monday as investors turned their attention to China’s weakening economy, the world’s largest importer of petroleum. As a result, it rekindled worries about a global recession and declining fuel consumption.
As of 0645 GMT, Brent oil futures for December settlement were down as much as 1.1%, 77 cents, or 0.8%, at $97.15 a barrel. West Texas Intermediate oil for November delivery fell as high as 1.1% before ending the day at $92 a barrel, down 64 cents or 0.7%. Statistics released on Saturday showed that services activity in China fell for the first time in September as the coronavirus hit demand and business confidence.
Concerns about a potential worldwide recession being brought on by multiple central banks hiking interest rates to battle rising inflation rates are mounting. This slowing of China’s economy only heightens those worries.
Stephen Innes, managing director at SPI Asset Management, noted that oil is under pressure from China’s economic weakness, U.S. monetary policy tightening, and Biden administration SPR involvement. The OPEC+ decided to lower their output target by 2M barrels per day last week.
After the announcement of the cut, Brent and WTI had their largest weekly percentage increases since March. The OPEC+ supply limitations will decrease demand in a market that is already tight and occur before an oil embargo by the European Union. European Union sanctions against n oil will go into force in December and February. ING analysts mentioned that the drop is certainly good. However, there is certainly still a lot of additional uncertainty in the market, including how n oil supply evolves owing to the EU oil boycott and G7 price ceiling, as well as the demand forecast given the worsening macro picture.
The post The Recession Fears Are Leading to Skyrocketing Oil Prices appeared first on FinanceBrokerage.
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