The return of fears about the global economy is causing oil prices to fall
Oil prices have finally decided to continue their basic downtrend this week and leave the bottom of their range where they have been developing since early fall. Economic fears regained the upper hand over supply fears, pushing barrel prices to new annual lows.
As in the stock markets, the return of selling pressure follows very poor manufacturing PMIs in the world’s three major economic blocs and a significant drop in the Chicago PMI to a level that systematically preceded a recession in the world’s largest economy.world (USA).
The deterioration of the economic outlook is still far from over, given the low probability of recession and analysts’ expectations of earnings growth for next year. So there still seems to be some room for risky assets to bottom out.
Nevertheless, from a flow perspective, a significant new buyer will return to the oil market below $70. The US has announced its intention to rebuild its strategic stocks below this price level, after liquidating them in recent months to put pressure on energy prices.
WTI (Turbo US Light Crude) Oil Price Daily Chart – Key Levels