After plunging more than 8% to the lowest level since April, Bloomberg oil steadied above $100 a barrel after worrying that a recession will hurt demand.
None Person of Interest in July 4 Parade Shooting Killed Six in Police Custody
West Texas Intermediate was 2% higher in Asia as fears of a global slowdown were balanced by a tight supply situation. The dramatic sell-off of crude was accompanied by deep losses in other commodities, including copper.
Concerns about a possible recession rattled financial markets as oil opened on a weak footing in the third quarter. With central banks like the Federal Reserve jacking up interest rates to tame inflation, investors are pricing in the consequences of a slowdown, even as physical crude markets continue to show signs of vigor and the war in Ukraine drags on.
Catherine Birch, an analyst at Australia New Zealand Banking Group Ltd, said the market is pricing in a mild recession, which should see support for Brent crude at around $100 a barrel. She said that the support level could drop to $80 in the unlikely event of global demand falling by 5%, an event that has only happened in the most severe of recessions.
The world's biggest oil importer emerges from strict virus lockdowns that have pummeled demand, there are signs of rising consumption in China. The total consumption of gasoline and diesel last month was close to 90% of June 2019 levels, according to people with knowledge of the energy industry.
In Russia, there is scope for an interruption to exports on top of the sanctions imposed by the US and other nations. A Russian court ordered the Caspian Pipeline Consortium to halt its Black Sea oil loadings for 30 days due to violations of a spill-prevention plan. It is not clear when that period will start.
Commodities have peaked, but raw material prices should remain elevated in the second half, according to Citigroup Inc. In a note, the bank said if there is a recession, crude could fall below $70 a barrel.
No Gangs Are Fake-Killing People in India for Insurance Payouts