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Oil tumbles again, returning to pre-Ukraine invasion levels



Around 2:15 p.m. GMT (4:15 p.m. in Paris), a barrel of Brent from the North Sea, for delivery in September, lost 3.67% to 95.93 dollars. A barrel of American West Texas Intermediate (WTI), for delivery in August, fell 4.40% to 92.04 dollars.

Fears of a slowdown in demand erased the gains made after the invasion of Russia, when crude oil prices rocketed to levels not seen since the 2008 financial crisis.

The two world crude benchmarks thus returned to their levels before the invasion of Ukraine, when Brent was worth between 95 and 99 dollars a barrel and WTI was trading between 90 and 94 dollars a barrel.

Both Brent and WTI prices, however, remain up around 22% for the year, with supply disruptions and the prospect of an imminent Russian invasion having already driven prices higher at the start of the year. year before the start of the war on February 24.

“Recession fears are once again the engine” of the fall in prices, comments Craig Erlam, analyst at Oanda. The European Commission on Thursday lowered its growth forecasts for the euro zone for 2022 and 2023, to 2.6% and 1.4% respectively, against 2.7% and 2.3% expected so far, due to the growing impact of the war in Ukraine.

Inflation has meanwhile been propelled to historic highs, with consumer price inflation estimated at 7.6% in 2022 and 4% in 2023, from 6.1% and 2.7% previously, according to forecasts from Brussels.

On Wednesday, the release of the consumer price index (CPI) in the United States in June “reinforced the prospect of an aggressive hike by the Fed (US Federal Reserve) to slow the US economy”, says Stephen Innes, of Spi.

Prices soared again in June in the country, with inflation reaching 9.1% and climbing to the highest since November 1981. A sharp rise that threatens growth, consumption being the main driver of the US economy .

For Tamas Varga, analyst at PVM Energy, with a further rise in key rates, “the economy should contract” and growth will gradually slow down, “which will have an inevitable impact on the demand for oil”.




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