Oil prices accelerated their decline on Tuesday, falling more than 5% after the International Monetary Fund (IMF) cut its outlook for global growth significantly, raising fears of a decline in black gold demand. At about 3:35 pm GMT (5:35 pm in Paris), a barrel of Brent from the North Sea for delivery in June lost 5.13% to $107.35 and fell back below $110.
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A barrel of US West Texas Intermediate (WTI) for delivery in May fell 5.29% to $102.49. †Crude oil falls today as recession fears resurface and the IMF’s global growth outlook has been cut by nearly a full percentage pointComments Ipek Ozkardeskaya, analyst for Swissquote bank, interviewed by AFP.
The IMF sharply lowered its global growth forecast for 2022 on Tuesday due to “seismic wavescaused by the war in Ukraine. Growth should therefore be 3.6% this year, a decrease of 0.8 percentage points compared to the January forecast.
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Demand falters in China
†So the decline we are seeing today mainly reflects a weaker demand outlook due to concerns about the global slowdown.“, continues Ipek Ozkardeskaya. The request was alreadybit short of breath latelyespecially in China, notes Commerzbank analyst Carsten Fritsch.
†The coronavirus restrictions put in place by authorities likely played their part“, he emphasizes, the 25 million inhabitants of Shanghai, the economic capital of China, have been locked up since the beginning of the month because of the Covid-19 epidemic.
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But according to Stephen Innes, an analyst at Spi Asset Management, the prices of black gold have been torn apart.”between global supply shortages and falling Chinese demand†The decline is likely to be limited as supply-side concerns loom“, Among “the reluctance of OPEC (the Organization of the Petroleum Exporting Countries) to pump more oil, the escalation (of war) in Ukraine, the unrest in Libya and the attacks by Houthi rebels in Saudi Arabia», mentions Ipek Ozkardeskaya.
