Recession fears bring oil prices down to pre-Ukrainian war levels

LONDON (Archyde.com) – Oil prices fell today, as fears escalated of an economic recession that might weaken demand for fuel, as Brent crude touched $93.50 a barrel, the lowest level since February 21, before the Russian military attack on Ukraine led to a price hike. 15.43 GMT, Brent crude futures fell $2.88, or 3 percent, to $93.90 a barrel, while US West Texas Intermediate crude futures fell $2.37, or 2.6 percent, to $88.29 a barrel. Brent crude recorded its lowest level at $93.50 a barrel, the lowest since February 21, while US crude touched its lowest level since February 3 at $87.97. The sale came on the heels of an unexpected buildup in US crude stocks last week. The Energy Information Administration said gasoline stocks also showed a sudden increase as demand slowed. Demand forecasts remained under pressure from mounting fears of economic recessions in the United States and Europe, debt distress in emerging market economies and the tightening COVID-19 policy in China, the world’s largest oil importer. “A pullback from $90 is now a very real possibility, which is very nice considering how tight the market is and how little room there is to mitigate that,” said Craig Erlam, chief market analyst at OANDA in London. “But talk of stagnation is increasing, and if it becomes a reality, it is likely to address some of the imbalances,” he added. The increased pressure came on the heels of concerns that higher interest rates might slow economic activity and curb demand for fuel. The Bank of England raised interest rates on Thursday and warned of the risks of a recession.