From 9:10 a.m. EST on Wednesday, the crude WTI fell below the $ 105 mark per barrel and traded at $ 102.77, down 6.24 percent on the day. The international benchmark, Brent Crude, had fallen below the $ 110 mark and was at $ 108.18, down 5.70%.
A growing number of analysts and economists now say that the Fed’s efforts to curb inflation by aggressively raising interest rates may fail to meet the policies of the US economy for a “gentle landing” and will in fact lead to a recession within a year. or a year and a half.
In addition, the strong US dollar also burdens oil prices, as a strong dollar makes oil purchases more expensive for holders of other currencies. The rise of the US dollar could affect the level of imports to oil-importing countries.
The Biden government – embroiled in a dispute with the US oil industry over who’s fault for the $ 5 a gallon price of gasoline in the United States – is pushing for a temporary federal gas tax, which is likely to burden prices.
“Apart from the recovery in Libya’s production, broader macroeconomic developments, ie the growing risk of a slump in demand, have offset in recent meetings more than a continuing narrow supply outlook due to sanctions, the peak of demand and to several OPEC + producers who are having difficulty. “to increase production to agreed levels,” Saxo Bank said in a daily comment on Wednesday.
“President Biden’s fight against high petrol prices in the run-up to the by-elections has also received some attention, although a possible petrol tax holiday, while supporting consumers, would support demand, thus extending the tight period,” they said. bank strategy analysts.
By Tsvetana Paraskova for Oilprice.com
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