Oil falls most in a year on slowdown fears
2023-10-05
Summary:
Oil prices plunged by more than $5 a barrel on Wednesday over concerns interest rates that stay high for longer could dent economic growth.
Oil prices plunged by more than $5 a barrel on Wednesday over concerns interest rates that stay high for longer could dent economic growth.
This marks a U-turn after the benchmark traded just short of $100 last week on robust demand and tightening supply. Yields on benchmark 10-year US Treasury notes hit a 16-year high lately.
For WTI futures that are traded on CME Group’s Nymex exchange, net bullish positions held by money managers have built up since the summer.
US stockpiles of gasoline jumped almost 6.5 million barrels last week, the biggest build in nearly two years, a government report showed.
Despite rising oil prices, drillers have been cautious about expanding operations, vowing not to build new vessels to replace the ones they scrapped during the downturn.
The chief economist of Equinor said that Crude Oil prices could rise to $100 a barrel based on the OPEC+ decision on Wednesday to maintain supply cuts.
The Fed should hold interest rates at elevated levels ‘for a long time’ to bring inflation back down to its 2% target, Atlanta Fed President Raphael Bostic said.
Brent hovers around multi-week low after breaching its support level. Confirmation of a breakout under the 50-day EMA and negative RSI divergence suggested that upside momentum was fading.
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