On concerns that significant increases in US interest rates may result in a global economic slowdown and lower demand for fuel, oil prices fell 4% Wednesday, capping a three-session gain.
Brent oil contracts for October delivery had decreased 4. 1% to $ 92. 50 per barrel at 14:15 GMT.
Additionally, the price of a barrel of September West Texas Intermediate oil for delivery in the United States, which expires at the conclusion of today’s trading session, plunged to $86.60.
Later, the two benchmarks partially recovered their losses, with US crude trading at $87. 25 and Brent trading at $93.
Following this performance, the sessions remained stable, largely as a result of the influence of the conflict between the global supply limitation, recession concerns, and the dollar gain.
Ole Hansen, head of commodities at Saxo Bank, claimed that rising natural gas prices, exacerbated by dwindling Russian supply, are raising oil demand.
Early in March, the price of Brent crude reached above $140 per barrel; however, it has subsequently fallen while inflation has skyrocketed to multi-decade highs.
According to Hansen, refinery earnings were once again on the rise, in part because of higher gas prices, while institutions continued to sell crude oil in anticipation of an economic slump. This makes refined alternatives like diesel appear inexpensive.
Global supplies are still somewhat limited, and a pipeline operator who moves 1% of the world’s oil through Russia has announced that it will again cut back on production because of malfunctioning machinery.
A rise in the US dollar often has a negative effect on the market because the majority of the world’s oil trading is done in dollars. In the meantime, the dollar index shot up to its highest level in five weeks on Monday.
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