Oil prices plunged in Tuesday’s trade as worries about the global economic outlook and energy demand intensified.
Specifically, the October crude contract fell $5.86, or 6%, to $91.15 a barrel on the New York Mercantile Exchange.
October Brent lost $6.81, or 6.5%, to $98.28 a barrel on ICE Futures, while the most active November contract fell $5.55, or 5.4%, to $97.38. the barrel.
Central banks in the US and Europe are preparing to resort to more aggressive interest rate hikes to tackle runaway inflation, putting the outlook for global growth at risk.
Analysts warn of the risk of recession in the US and Europe, which will deal a big blow to fuel demand.
Prices have been gaining ground in recent days on fears of already tight supply, with Saudi Arabia even leaving open the possibility of further OPEC+ production cuts.
However, this was more about the case of bringing Iran back into the market, a possibility that appears to be receding as Tehran said today that it will not accept “excessive demands” from the UN Atomic Energy Agency (IAEA).
At the same time, an OPEC+ source told the Russian news agency TASS that OPEC and its allies are not currently discussing the possibility of production cuts.
At the same time, the output of Iraq – OPEC’s second largest exporter – has so far not been affected by the political unrest in the country, as the market had feared.
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