Oil prices are tumbling amid a strong dollar and demand destruction as recession fears grow. On Wednesday, crude BZ F fell below $100 per barrel, for the first time since April, while the U.S. crude futures CL F fell below that level on Tuesday.
Demand destruction is starting to factor into oil prices, according to Rohan Reddy, Global XETF's director of research, who told Yahoo Finance Live that demand destruction is getting to a point where economic concerns are being taken into account, according to Rohan Reddy, Global XETF's director of research.
Reddy said that there was a strong dollar and a hawkish Fed despite supply side concerns. We think that is weighing on oil prices a lot right now. The recent decline in crude comes on the heels of a spike in the U.S. dollar against other currencies. A stronger dollar puts pressure on the price of oil, which is traded in dollars.
Ready predicts that the dollar won't stay high for a long time. He points out that China's economy will add upward pressure to crude prices going forward.
We're very positive on the price of oil over the next 6 -- 12 months, but we do believe there is going to be more volatility in oil prices, said Reddy.
Analysts have been anticipating how low prices could go if the world falls into a recession, with Citi forecasting $65 per barrel by the end of the year.