Crude oil falls more than 3% on fears of global recession

Crude oil futures ended Tuesday’s (Aug. 15) trading session down more than 3 percent as investors worried about a global recession following the release of weak economic data from the U.S. and China. Oil prices were also pressured by the prospect of progress in negotiations on the Iran nuclear deal, which could see Iran resume oil exports to the global market.

  • WTI crude futures fell $2.88, or 3.2%, at $86.53 a barrel.
  • BRENT crude futures fell $2.76, or 2.9%, at $92.34 a barrel.

Weak economic data put pressure on oil markets last night. According to the U.S. Department of Commerce, housing starts in July fell 9.6% to 1.446 million units, the lowest level since February 2021 (1.599 million units in June).

Builders are affected by rising mortgage rates and building material prices.

Phil Fine, price analyst Future said investors are reacting to reports of U.S. housing starts due to concerns about the economic slowdown and household energy consumption.

Retail sales and industrial production in China rose less than expected in July. At the same time, the People’s Bank of China announced a cut in key interest rates to support the economy. This is a measure that exceeds expectations and it shows that the Chinese central bank is concerned about the economic outlook in the country.

A European Union (EU) spokesman said the EU has received a response from Iran to the EU’s proposal to resume the 2015 nuclear agreement. He said the EU is considering this proposal and is consulting with the United States.

Iran responded to the EU proposal on Monday, calling on the U.S. to show more flexibility in reinstating the nuclear agreement.

Investors are awaiting the EIA’s weekly crude oil inventory report today.

The Spot Market is Open

Wednesday, August 17, 2022

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
10.00

86.95

+0.42

+0.49%

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