Oil Dips Below $90 on Developed Markets Recession Fears
Oil dips below $90 per barrel driven by developed markets recession fears and the oil group members’ countries’ decision to raise September crude production volume by 100,000 barrels per day.
Top importers, China, India and United States are currently battling weakening economic growth due to rising headline inflation. The inflation surge across developed markets has also necessities interest rate hikes.
On Thursday, the Bank of England booked its steepest benchmark rate hike since 1995 with a projection that the United Kingdom will slip into recession in the fourth quarter.
Market data shows that West Texas Intermediate (WTI) crude oil fell to a six-month low Thursday, falling under US$90 per barrel following a day prior report of an unexpected rise in US oil and gasoline inventories as recession worries continue to dominate trading.
WTI crude for September delivery closed down US$2.12 to US$88.50 per barrel, Marketwatch reported, the lowest since Feb.2. October Brent crude was last seen down US$2.63 to US$94.15, while Western Canada Select was down US$3.00 to US$68.46 per barrel.
Prices fell to the lowest since the weeks prior to Russia’s invasion of Ukraine after the Energy Information Administration on Wednesday reported US oil inventories last week unexpectedly rose by 4.5-million barrels while gasoline stocks climbed 0.2-million barrels in what is usually the peak of the US driving season.
A minor, 100,000-barrel per day, rise in OPEC+ quotas for September set on Wednesday did not offer support for oil as recession fears continue to dominate trade. READ: Bond Yield Spikes as Selloffs Dominate Debt Market
Those fears were heightened on Thursday after the Bank of England hiked interest rates by 0.5 percentage points and said it expects the UK to enter recession by the fourth quarter with inflation rising to 13%.
“Oil prices are weak in the wake of the OPEC+ meeting, which may have less bearing on the price action than the outlook for the global economy as a possible coming recession impacts the demand outlook,” Saxo Bank noted on its website. #Oil Dips Below $90 on Developed Markets Recession Fears