Oil prices hit one-month low on fears of recession

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NEW YORK/LONDON (DPA-AFX) – Oil prices fell sharply on Wednesday, hitting their lowest level in almost a month. At midday, a barrel (159 liters) of North Sea Brent cost $109.56. It was $5.12 less than the day before. The price of a barrel of US West Texas Intermediate (WTI) grade fell $5.48 to $104.04.

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Growing fears of a slowdown in the market were cited as the reason for Rohal’s price cut. One trigger is the determined fight of many central banks against high inflation. The focus is on the US Federal Reserve, which recently tightened its monetary policy with an unusually significant interest rate hike of 0.75 points.

Fed Chair Jerome Powell makes regular midweek appearances before the US Senate. Federal Minister of Finance Christian Linder is also concerned: “Due to sharply rising energy prices, supply chain problems and inflation, there is a risk of a very serious economic crisis.”

Commerzbank analyst Carsten Fritsch also mentioned Thursday’s upcoming meeting between US President Joe Biden and representatives of the US oil industry. Biden accused the refineries last week of producing too little gasoline. “Apparently, many market participants are assuming that the petroleum industry will humble itself and the supply of petrol will expand significantly,” writes Fritsch. However, this is not possible due to limited free processing capacity.

Oil prices remain high despite recent price cuts. They are currently 40 percent better than at the beginning of the year. The main reason is Russia’s war against Ukraine and severe sanctions mainly by Western countries. Russia is one of the largest oil suppliers in the world./jsl/bgf/stk

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