The prices of Oil sank Tuesday to its lowest in four monthsin a market pworried about a possible recession due to interest rate adjustmentswhich created turmoil in the US banking sector.
The price of a barrel of Brent from the North Sea for delivery in May lost 4.1% to close at 77.45 dollars in London, while the barrel of West Texas Intermediate (WTI) for April lost 4.6% to 71.33 dollars in New York.
“This banking crisis reinforces the fear of a recession”commented John Kilduff, of Again Capital, referring to the bankruptcy of three US banks since last Wednesday.
Despite the fact that Wall Street stabilized on Tuesday after the initial shock of bankruptcies, and the urgent measures adopted by the US authorities to guarantee bank deposits, “This affects investor confidence” in the financial system and “in the economy in general.” “It doesn’t bode well for oil demand”emphasized the analyst.
“Not counting gold, it’s the entire commodity sector that seems to think we’re headed for a recession,” explained Bill O’Grady of Confluence Investment. “Most of the traditional indicators announce it”insisted the analyst, who mentioned in particular the evolution of the Treasury rates have been higher in the short term than in the long term for months, a phenomenon that almost consistently portends a recession.
Source: Ambito
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