Oil prices close with losses on fears of a global recession

Los oil prices They fell on Monday as investors viewed economic storm clouds that could herald a global recession and erode fuel demand as more relevant than possibly tighter supply.

The futures of Brent crude oil they fell $1.73, or 1.77%, to $96.19 a barrel.

The crude West Texas Intermediate (WTI) lost $1.51, or 1.63%, to $91.13 a barrel.

Chicago Fed President Charles Evans said there was a strong consensus at the Fed to raise rates to around 4.5% by March and keep them there.

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There is more pessimism on the part of people about what they are going to do with the economy, because they are not so convinced that they have inflation under control, and that is the macro game that is weighing on oil,” said John Kilduff, partner of Again Capital LLC in New York.

Los oil prices they were also affected by the strengthening of the US dollar, which rose for the fourth session. A stronger dollar makes crude more expensive for non-US buyers.

The prospect of reduced oil supplies from the OPEC+ limited the fall in prices. But indications that the group’s de facto leader, Saudi Arabia, would continue to serve Asian clients at full capacity lowered expectations of the impact of the cuts.

The Brent and the WTI recorded their biggest weekly percentage gains since March after the announcement of the reduction in the OPEC+.

Concerns about still relatively robust demand have been heightened by support for the European Unionat the end of last week, a plan of the G7 to impose a price cap on Russian oil exports.

“A recessionary economic outlook will cause lower demand for oil,” Fitch Ratings said on Monday. “However, we expect price volatility to remain high in the short term, due to geopolitical factors, such as new sanctions leading to reduced Russian exports.”

Meanwhile, service sector activity in China during September it contracted for the first time in four months, as the restrictions for the Covid-19 hit demand and business confidence, the data showed on Saturday.

The slowdown in Chinathe second largest consumer of oil in the world, behind the United States, adds to the growing concern about a possible global recession caused by the rise in interest rates by many central banks to combat high inflation.

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