WTI oil: barrel down from one-month high

Oil prices are starting to fall after a 20% recovery in two weeks

Oil prices have started to fall after rising more than 20% in two weeks to one-month highs of around $92 for WTI and $98 for Brent on the back of reduced supply. Indeed, oil prices have recently benefited from OPEC+’s decision to significantly reduce its production quotas, although they were not met by several members of the cartel, and from Western sanctions against Russian hydrocarbons.

Nevertheless, the strength of the dollar and the prospect of weakened demand are coming to the fore, causing a small drop in oil prices since Monday. The dollar rose higher on expectations that the US Federal Reserve will continue its aggressive monetary policy tightening, while fears of a global recession also gripped the markets.

JP Morgan CEO Jamie Dimon has warned that the US and global economy is at risk of slipping into recession by the middle of next year, while the IMF and World Bank have seen increasing risks of a global slowdown. Those fears of a recession have been reinforced since Monday by the resurgence of Covid-19 cases in China, a week before the party congress, raising fears of new health restrictions in the country.

WTI Oil Price Daily Chart – Key Levels

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