As investors grew more concerned that energy demand would suffer in a future global recession, oil prices dropped by almost 2% to a 12-week low in choppy trade on Wednesday, compounding Tuesday’s steep losses.
By 1:27 p.m. EDT, Brent futures for September delivery had dropped $2.20, or 2.1 percent, to $100.57 per barrel (1727 GMT). West Texas Intermediate (WTI) crude for the United States dropped $1.54 or 1.6 percent to $97.96. For the second day in a row, both benchmarks were technically oversold and headed for their lowest closes since April 11.
Trade was choppy, with both benchmarks abruptly retracting from early gains of more than $2 per barrel due to supply concerns. For months, crude futures have been incredibly volatile.
Tuesday saw a 9% decline in Brent and an 8% decline in WTI. The $10.73 decline in Brent was the third-largest for the contract since trading began in 1988. In March, the highest decrease was $16.84.
U.S. diesel futures also decreased by roughly 5%.
‘Recession fears,’ ‘the winding down of the oil trade as an inflation hedge,’ ‘a stronger US currency, hedge funds reacting to the negative oil price trend, producer hedging,’ and ‘new mobility restriction concerns in China,’ according to analysts at the bank UBS.
Post Your Comments