Oil plummets, WTI plunges below $100

Oil plummets, WTI plunges below $100

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Carried away by fears of recession, crude oil prices plummeted by nearly 10% around 6:10 p.m.

Oil prices accelerated their plunge on Tuesday as fears of a recession in crude-consuming countries that could destroy demand outweighed worries about supply disruptions, dragging the metals down. base.

Around 4:10 p.m. GMT (6:10 p.m. CET), a barrel of Brent from the North Sea, for delivery in September, tumbled 9.05% to 103.23 dollars, after falling nearly 10%.

The barrel of American West Texas Intermediate (WTI), for delivery in August, fell 8.48% to 99.24 dollars, slipping below 100 dollars a barrel.

“Recession fears are reducing the outlook for oil demand and driving down prices,” Swissquote analyst Ipek Ozkardeskaya told AFP.

The American WTI slipped below the symbolic bar of 100 dollars a barrel, a first for almost two months.

Oil having crossed this important “psychological threshold”, the analyst evokes the possibility of a drop in prices until a next fateful level, that of 85 dollars a barrel.

In a recession scenario, Citi analysts even suggest that oil prices would fall to 65 dollars a barrel by the end of the year, then to 45 dollars in the absence of intervention by the Organization of oil-exporting countries (OPEC+).

Supply in the background

The oil market is “turning away from inflation” and heading towards “economic desperation”, says Stephen Innes, analyst at Spi Asset Management.

“PMI indices underline the risks of recession in the euro zone”, argues Neil Wilson, analyst at Markets.com, for whom “recession seems inevitable”.

Growth in economic activity in the euro zone slowed sharply in June in the private sector, to its lowest level in 16 months, according to the final composite PMI index published on Tuesday by S&P Global.

Fears of a global recession have taken precedence over “the more obvious supply problems” which are now “relegated to the background”, says Mr Innes.

Oil prices are falling as Norway may have to cut its gas exports by almost 60% and more than 340,000 barrels of crude this weekend due to a wage strike, the minister warned. employers in the oil sector.

The strike started on Tuesday has already resulted in the shutdown by the national giant Equinor of three offshore deposits (Gudrun, Oseberg East and Oseberg South). On Wednesday, in the event of an escalation of the strike, four deposits would follow.

“The current conflicting signals given by the (bearish) demand and (bullish) supply of the oil equation make forecasting oil prices a laborious task,” comments Tamas Varga, analyst at PVM Energy.

“It is impossible to predict when the focus will shift irrevocably from supply to demand,” he explains.

The metals swept away in the fall

Fears of a global recession also continue to dominate industrial metals markets, particularly copper.

Heavily used in industry, especially for making electrical circuits, copper is known to reflect the state of health of the world economy, hence its nickname of Doctor Copper (Dr Copper).

The red metal is thus very sensitive to a potential slowdown in global economic activity, serving as a barometer of the economy.

For the first time in 17 months, copper traded below 8,000 dollars per ton, falling 21% since the start of the year. On Tuesday, it touched 7,627.00 dollars per ton.

“The strength of the dollar and weak US economic data were likely the main factors that weighed on its price,” commented Carsten Fritsch, analyst at Commerzbank.

The LME Index, an index that incorporates the prices of aluminium, copper, lead, nickel, tin and zinc traded on the London Metal Exchange, posted 3,822.6 points on Monday, losing more than 15% since the beginning of the year.

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