Business News Asia
Crude oil futures closed lower on Tuesday (Oct. 11) as investors feared that global oil demand could be affected by a possible global recession and the COVID-19 epidemic situation in China.
WTI crude futures were down $1.78, or 2%, to close at $89.35 a barrel.
BRENT crude futures were down $1.9, or 2%, at $94.29 a barrel.
International Monetary Fund (IMF) Managing Director Kristalina Georgieva and World Bank President David Malpass warned that the global economy would be more vulnerable to recession next year and that inflation would continue to weigh on it.
The IMF published its World Economic Outlook yesterday, lowering its forecast for global economic growth in 2023 from 2.9% to 2.7%.
Factors impacting the global economy include the Russian military attack on Ukraine, the cost of living crisis, and the slowdown in the Chinese economy, which will lead to economic volatility in geopolitics.
Meanwhile, the IMF lowered its forecast for U.S. economic growth this year and next to 1.6% and 1%, respectively, due to the Federal Reserve’s accelerated rate hikes.
The IMF also lowered its forecast for Chinese economic growth this year and next to 3.2% and 4.4%, respectively, due to China’s tightened measures to contain the spread of COVID-19 and the crisis in the real estate sector.
Concern over the COVID-19 situation in China is another factor affecting the oil market. The number of people infected with COVID-19 has prompted Chinese authorities to take measures to contain the outbreak ahead of the Chinese Communist Party General Assembly on October 16, as people are concerned that Chinese authorities will impose another round of lockdown measures in Shanghai.
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Wednesday, October 12, 2022