Crude oil extended yesterday’s losses in the last trading session of September, ending a quarter with more than 20% losses for the commodity markets.
At around 4:30 pm, WTI (American benchmark) and Brent (international benchmark) futures lost, respectively, 1.86%, at US$ 79/barrel, and 2.86%, at US$ 88/barrel. It’s the fourth consecutive month of declines for the benchmark. Brent, used by Petrobras to estimate refinery prices.
What’s behind the oil crash?
The great villain for commodity markets in the third quarter has a name: recession. There is widespread fear among investors that contractionary monetary cycles will decisively impact major world economies, suppressing global demand for fuel.
News from China, the US and Europe does not help to dissuade investors from a defensive posture. On the Chinese side, downward pressure on the world’s second-largest economy continues, as attempts are made to measure the impacts of intermittent lockdowns on domestic consumption and an unresolved housing crisis.
The monetary tightening carried out by the Federal Reserve is the problem of the moment for the US markets. At this point, several directors of the institution have already signaled that interest rate increases will continue until inflation of 9.1% falls again. And nobody expects that to happen before 2023.
The Fed’s handbrake in the US economy is even behind the dollar spiral, considered a safe asset for times of risk aversion. With the US currency gaining on top of major currency pairs such as the euro, pound, yuan and yen, buying oil on international circuits has become more expensive and therefore restricted.
In Europe, however, there are multiple and simultaneous crises. Leaks in pipelines Nord Stream 1 and Nord Stream 2 feed the prospect of a hard winter for Europeans in terms of energy, since the lack of natural gas supply — the main component of the energy matrix of European countries — can catalyze a shutdown of the most developed economies in the coldest months. of the year.
The rising cost of energy as a result of Russian retaliation for Western sanctions has been the basis for rising inflation in the region’s major economies.
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Source: Moneytimes
I am a journalist with over 6 years of experience working in the news industry. I currently work as an author for Global Happenings, and my coverage focuses on Technology news. I have written for various publications, including Reuters, The New York Times and The Guardian.
