Oil prices fall to nine-month low amid economic uncertainty

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Crude oil prices It fell for the second day in a row. Amid weak economic data from both China and the US this week, WTI crude oil prices fell below $70 a barrel (around €63) for the first time since December 2023, while Brent crude futures fell below $74 a barrel (€67). A level we haven’t seen in nine months.

Both reference prices It fell more than 10%. From its recent highs on August 27. Risk-off sentiment also contributed to downward pressure on the oil market, as a technology sell-off led by Nvidia dragged global markets lower on Tuesday.

Investors fled risky assets amid Growing fears of recessionThe CBOE Volatility Index, known as the market’s fear gauge, crossed 20, its highest level in a month.

At the end of August, oil prices rose. Due to the escalation of the military conflict between Iran and Israelalong with production disruptions in Libya, which also fueled the rally.

However, fears of a wider regional war have receded with recession fears. Geopolitical tensions overshadowedA possible solution to the Libyan conflict is expected to restore its oil production.

Growing fears of recession

Several disappointing data from the United States have raised concerns about Deteriorating economic conditions Weak expectations for oil demand.

The world’s largest economy announced its manufacturing Purchasing Managers’ Index (PMI). Weaker than expectedNoting that industrial activity contracted for the fourth straight month in August. JOLTS job openings data on Wednesday also revealed that the number of available jobs fell to its lowest level since January 2021.

The deteriorating economic data has increased significantly. Possibility of interest rate cut The Federal Reserve is set to cut deeper next month, causing 2- and 10-year U.S. government bond yields to briefly reverse for the second time since 2022.

Short-term government bond yields They are more sensitive. For impending moves in interest rates. Historically, economic recessions tend to occur when the spread between benchmark U.S. government bond yields Back to positive territory After investment.

In addition, China, the world’s largest oil importer, reported a lower-than-expected manufacturing PMI over the weekend, suggesting industrial production remained in contraction For the third month in a row in August.

China’s Caixin Services PMI was also released on Wednesday. It was less than expected.Indicating that the country’s economic recovery is still faltering.

OPEC+ to postpone production increase

OPEC+ may delay its plan to raise output in October amid falling oil prices, Reuters reported. The group had previously agreed Increase production by 180 thousand barrels per day As part of its plan to gradually roll back production cuts.

Continued production cuts could provide some support to the weak crude oil market, despite news He did not raise prices immediately. Due to the prevailing feeling of risk aversion.

In June, OPEC+ and its allies agreed to extend production cuts by 3.66 million barrels per day. Until the end of 2025With additional voluntary cuts of 2.2 million barrels per day that will continue until September of this year.

The organization that supplies More than 37% of the world’s total oilIt has been cutting its production since 2022, resulting in a total reduction of 5.86 million barrels per day, representing 5.7% of global demand.