Oil falls in price on fears around demand

MOSCOW, 12 Oct — PRIME. World oil prices are falling on Wednesday morning amid fears of a global recession and a decrease in demand for this type of raw material, according to trading data and an analyst’s comment.

As of 8:36 Moscow time, the price of December futures for Brent crude oil is falling by 0.55%, to $93.77 per barrel, November futures for WTI – by 0.76%, to $88.67.

The cost of oil on Wednesday morning is declining for a number of reasons, one of which is the deterioration of the forecast for global economic growth by the International Monetary Fund (IMF). The organization expects growth to slow to 2.7% in 2023, not 2.9% as previously thought. In addition, the forecast for US GDP growth in 2022 was lowered to 1.6% from 2.3%, China’s GDP growth to 3.2% from 3.3%.

In addition, the continuing coronavirus restrictions in China and the prospect of a sharp increase in the rate by the US Federal Reserve continue to have a negative impact on quotes. Investors fear that “aggressive” actions of world regulators will cause a decrease in global economic activity and lead to the beginning of a global recession, which, in turn, may lead to a decrease in demand for “black gold”.

“Oil is struggling amid IMF growth rating downgrades, China restrictions and US hard landing worries… Any dip in risky assets could continue to weigh on oil prices until some kind of bottom forms.” Bloomberg agency opinion of SPI Asset Management analyst Stephen Innes.