Oil prices nosedive as recession fears rise across developed economies
Oil prices have plummeted a whopping $10 on both major benchmarks, as concerns over a looming global recession curtailed demand and drove down markets.
Brent Crude fell 11.98 per cent to $101.50 per barrel, while WTI Crude slipped below $100 following a 9.79 per cent slide, trading at $97.81 per barrel.
The drop in Brent Crude prices of $10.73 is the third largest absolute price drop fall since the contract started trading back in 1988.
Oil futures sank alongside equities, which often serve as demand indicator for crude, with investors fearing an economic downturn as central banks across the world take aggressive actions to limit inflation.
In its latest financial stability report, the Bank of England revealed the country’s economic outlook has “deteriorated materially”, while a hawkish Federal Reserve’s continued ramp ups of interest rates in the US also weighed down prices.
On the continent, Eurozone data revealed business growth across the bloc had slowed further last month, with forward-looking indicators suggesting the region could slip into decline this quarter as the cost of living crisis keeps consumers wary.
Nevertheless, supply concerns still linger with industrial action in Norway and Japanese price caps on Russian oil likely to shorten supplies further, a long-running factor which has kept prices historically elevated on both major benchmarks.
G7 leaders agreed last week to explore the feasibility of introducing temporary import price caps on Russian fossil fuels, including oil, in an attempt to limit Kremlin resources to fund its invasion of Ukraine.