Oil falls in price on fears for demand

Why Are Prices Going Up?
Why Are Prices Going Up?

MOSCOW, Sep 23 — PRIME. World oil quotes are falling on Friday morning, markets fear a recession after a series of rate hikes by the world Central Bank, which is reflected in demand expectations, according to trading data.

Media: EU wants to impose a ceiling on oil prices from Russia in the coming weeks

As of 8:05 Moscow time, the price of November futures for Brent crude fell by 0.46%, to $90.04 per barrel, November futures for WTI — by 0.46%, to $83.11.

This week, a number of world central banks decided to raise rates, including the US Federal Reserve System (FRS), the Bank of England and the National Bank of Switzerland. The Bank of Japan at the same time left the rate at a negative level of minus 0.1%, while maintaining a soft policy. Markets fear that increases could lead to a global recession, which in turn is reflected in expectations for oil demand.

At the same time, the Fed rate hike significantly supported the dollar. The dollar index (the exchange rate against a basket of currencies of six countries – US trading partners) has strengthened by 1.5% since the beginning of the week, from 109.6 points, and is now trading at 111.39 points. A value above 111 points is the highest in 20 years. A more expensive dollar makes commodities, including oil, less available to buy in another currency.

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Some support for oil quotes is provided by geopolitical risks, in particular, the decree of the President of the Russian Federation on the beginning of partial mobilization. The aggravation of the situation may lead to new sanctions against Russia, which is one of the largest oil producers in the world and was a major supplier of oil and gas to the EU.

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