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Oil Prices Continue Their Fall As Recession Fears Weigh
Investors are now assessing the continued aggressive rate hike pace by the US Federal Reserve, the slowdown in global growth and the resurgence of Covid cases in China to hurt global oil demand
Photo Credit : www.freepik.com
Oil prices dropped for a third consecutive day on Wednesday on fears of escalating concerns of slowing global growth and US President Joe Biden stating that a recession is possible.
West Texas Intermediate fell below USD 89 per barrel. Brent futures were also trading around USD 94 per barrel on Wednesday.
Oil prices hit their lowest levels last month since January 2022 on fears of subdued demand due to an imminent worldwide recession. The prices recovered only after the OPEC+ grouping announced a significant production cut of 2 million barrels per day on 5 October.
However, investors are now assessing the continued aggressive rate hike pace by the US Federal Reserve, the slowdown in global growth and the resurgence of Covid cases in China to hurt global oil demand.
In an interview this week, President Joe Biden accused Saudi Arabia of allying with Russia on the production cut. He said that he might rethink the US’ relationship with Riyadh.
A strong dollar is also aiding the fall in oil prices as it makes commodities priced in the currency more expensive for overseas buyers.