Oil prices fell amid fears of a recession

MOSCOW, 11 Oct — PRIME. World oil prices on Tuesday evening are falling by about 2%, investors’ fears about a recession play a key role in the decline in quotations, follows from trading data and expert comments.

As of 19.55 Moscow time, the price of December futures for Brent crude fell by 1.61% to $94.64 per barrel, November futures for WTI fell by 1.76% to $89.53.

Earlier Tuesday, the International Monetary Fund (IMF) downgraded its growth forecast for the global economy. 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 IMF report says that global inflation will peak at 8.8% at the end of the year and remain elevated for longer than previously expected, and recession will affect more than a third of the global economy.

At the same time, 88.3% of analysts surveyed by CME Group believe that in November the US Federal Reserve System (FRS) will raise the base rate by 75 basis points. Investors fear that the “aggressive” policy of central banks will lead to a slowdown in global economic activity and the beginning of a global recession.

Last week, the OPEC + alliance decided to cut oil production by 2 million barrels per day from November. The reduction in supply was the main factor behind the increase in oil prices last week – Brent rose in price by 11.3% over the week, and WTI – by 16.5%.

Analysts at StoneX, whose opinion is quoted by Bloomberg, believe that oil prices are declining, as “concerns about a recession are diverting investors’ attention from the reduction in supply in the market.”