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Fears of a global recession are driving oil prices below $100.

Oil prices dropped on Wednesday as investors worried that draconian interest rate increases to combat inflation might trigger a recession and further reduce demand for oil.

At 9.10 a.m. local time (0610 GMT), international benchmark Brent crude was trading at USD99.34 a barrel, down 0.15 percent from the previous session’s closing price of USD99.49 a barrel.

American benchmark West Texas Intermediate (WTI), which closed the previous session at USD95.84 per barrel, was trading at USD95.78 per barrel at the same time on Wednesday, down 0.06 percent.

As central banks aggressively boosted interest rates to battle inflation, oil prices fell further as concerns about a worsening global recession increased.

As interest rates rise globally to combat inflation and a new wave of the Covid-19 outbreak drives Chinese towns to take dramatic action, fears of declining global oil demand put downward pressure on prices.

Market participants are closely monitoring US President Joe Biden’s visit to the Middle East, where he is likely to call on Saudi Arabia and other Gulf producers to increase their oil production in order to support price stability.

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