Meanwhile, the West Texas Intermediate (WTI) for August fell 1%, installed since Tuesday below the level of US$100, now at US$98.53 at the close. It should be noted that on Tuesday, the two barrels collapsed.
It was for Brent “the third biggest drop in absolute numbers since the forward contract began trading in 1988,” the UBS analysts said. Brent lost 9.45% at the close, but fell almost 11%.
“These falls are due to fears that a recession will destroy demand, which is beginning to fall due to high prices” for crude oil, summed up Andy Lipow of Lipow Oil Associates.
Citi analysts predict that the price of a barrel of Brent could touch US$65 this year in a prolonged recession scenario.
In addition, traders meanwhile noted that no fundamental changes have disrupted the market since Tuesday.. The supply of black gold remains closely watched, with production interruptions in some countries.
“On the one hand, a recession could easily reduce demand for oil. On the other, supply remains tight,” said Russ Mould, an analyst at AJ Bell.
“In addition to growing pessimism about the future of the economy, oil prices were affected by the rally in the dollar,” said Stephen Brennock of PVM Energy.
In turn, the increasingly strong greenback makes a barrel of crude, quoted in dollars, more expensive for investors in other currencies.
Source: Ambito
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