After a brief respite, oil fell to a six-month low on Wednesday. This was after concerns over a possible global recession that could weaken demand outweighed a report showing lower U.S. gasoline and crude oil stocks.
The economic background was not improved by Wednesday’s figures. They showed that British consumer price inflation rose to 10.1% in August, the highest level since February 1982. This intensified the squeeze on households.
Brent crude oil fell 44 cents or 0.5% to $91.90 per barrel at 0815 GMT. It was earlier down to $91.64, its lowest level since February. U.S. West Texas Intermediate crude (WTI), fell 9 cents (0.1%) to $86.44.
Stephen Brennock, an oil broker at PVM, stated that “the oil market is struggling with recession fears and there is little evidence to suggest this will change anytime soon.”
A report that showed lower U.S. crude oil and fuel stocks gave support to prices earlier. Sources citing American Petroleum Institute figures Tuesday said that crude stocks dropped by 448,000 barrels and gasoline fell by approximately 4.5 million barrels.
Official inventory data from the Energy Information Administration is out at 1430 GMT.
In 2022 oil prices have risen to $147 per barrel, a record high that was reached in March following the Russian invasion of Ukraine. Despite these concerns, prices have declined since then. The prospect of recession has also helped to reduce them.
Craig Erlam, a broker at OANDA, stated that there are increasing downside risks due to the uncertainty surrounding Chinese COVID restraints and the growth outlook.
The market is waiting for developments in talks to revive Iran’s 2015 nuclear agreement with world powers. If a deal is reached, this could lead to an increase in Iranian oil exports.
On Tuesday, the United States and the European Union said they were examining Iran’s response to what the EU called its “final” proposal for saving the deal.
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