“In the three most recent recessions before the pandemic, oil skyrocketed in the run-up to the recession. We saw prices rise early in the year, only to cool off in the last six months,” the same analyst explained.Given this paradigm shift, he questions whether “oil is as prominent an economic indicator as it has been in the past.”
These days, Sean said, “You don’t have to look far for evidence of an impending recession: the housing market is slumping, the bond market yield curve has inverted, and the Federal Reserve projects the unemployment rate to rise in 2023.”.
Possible causes of the fall
For Phil Flynn, from Price Futures Group, crude oil suffered from a review of weather forecasts in the United States, which predict less cold than expected in the northern hemisphere.
Operators are also closely following the evolution of the situation in Chinawhere the National Health Commission (NHC) surveyed on Thursday more than 32,000 new cases of coronavirus in one day, a record since the pandemic began.
The confinements “they will weigh heavily on economic activity and, therefore, on the demand” for oilwarned Craig Erlam of Oanda.
In addition to what happens with the project promoted by the United States to put a cap on the price of Russian oil, the operators await the meeting of OPEC and its allies within OPEC+, on December 4.
For Commerzbank, although the cartel actually reduced its production by one million barrels per day in November, and not by two million as announced in October, the publication of updated data in this regard might support prices.
