As fears of global recession appear to be driving the oil markets into a longer-term spiral downwards, Brent and WTI broke new grounds through new technical levels.
Brent crude plummeted nearly 4.6%, below $90, and WTI plunged to $82, shedding over 5%. As of 12:40 p.m. EST, Brent crude is trading down 4.57% at $88.59 per barrel for a $4.24 change on the day. WTI was trading down 5.01% at $82.53, for a change on the day of $4.35.
There are no breaking developments driving prices downward, and no new data releases that would normally weigh on oil prices. Any rally in oil prices now is treated with skepticism by traders, rendering upswings brief.
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“Energy traders appear to be skeptical of any rallies as they digest a plethora of global economic challenges, a wrath of uncertainty to supplies, and looming crude demand destruction fears,” Bloomberg quoted Oanda senior market analyst Ed Moya.
Chinese demand concerns continue to put downward pressure on markets. Demand outlook remains a bearish weight on oil prices with China, the largest crude importer in the world, maintaining its zero-COVID lockdown policy that now has some 65 million people under a restricted movement regime.
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Last Tuesday, more lockdown orders were handed down in Guiyang, and a lockdown in the tech hub of Chengdu was extended. Additionally, China’s crude oil imports in August were 1.1 million bpd lower than the year-ago period and its exports were lower than expected, according to energy analytics provider OilX.
Likewise, OPEC+’s symbolic 100,000 bpd production cut for October led to a very temporary rally in oil prices earlier this week. As soon as the market digested the symbolism and returned to fundamentals, oil prices resumed bearish activity.
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