Oil prices fall on fears of a recession

MOSCOW, 11 Oct — PRIME. World oil prices are falling on Tuesday morning after a significant increase last week, traders are worried about the possibility of a recession, according to trading data and an analyst’s comment.

As of 8:14 Moscow time, the price of December futures for Brent crude oil is falling by 0.43%, to $95.78 per barrel, November futures for WTI – by 0.57%, to $90.61.

Over the past week, Brent oil has risen in price by 11.3%, and WTI – by 16.5% on expectations of a reduction in supply, as OPEC + decided to cut oil production by 2 million barrels per day since November.

On Tuesday morning, oil prices are falling as part of a correction. In addition, investors fear that “aggressive” actions of world regulators will cause a decrease in global economic activity and the beginning of a global recession, which, in turn, may lead to a decrease in demand for “black gold”.

To combat high inflation, the world’s central banks are pursuing a tight monetary policy. Thus, in September, the US Federal Reserve System (FRS) and the European Central Bank (ECB) raised the base interest rate by 75 basis points, and the Bank of England – by 50 basis points. According to the CME Group, 82% of analysts predict that the Fed will raise rates again by 75 basis points at its meeting in November, which could be the fourth increase at such a pace and the sixth increase since the beginning of the year.

“Oil is in a correction phase after rising to $9 a barrel last week… Overall global economic activity is expected to slow,” Dennis Kissler, senior vice president of trading at BOK Financial, told Bloomberg.