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Analyst Yushkov: Fears of recession in Western economies influence oil price decrease

Photo by Lauren Mancke on Unsplash

According to the expert, this data is mainly influenced by “certain fears that the economy of Western countries may slip into recession.

“Everyone is afraid of that and prefers to get rid of oil futures now, while prices are still high, but the fact that they do it, the price does not go down, it is the value of the futures in the oil market that goes down,” he said.

As the analyst noted, all this happens against the background of the fact that at the end of March, the U.S. Federal Reserve System raised the interest rate.

“This leads to the fact that gradually the money supply is compressed in the economy, loans become expensive, no one takes them, and among other things, less money enters the exchange, which means that traders buy any exchange goods less, and including the fall in demand for oil futures, and the price decreases,” – explained the interlocutor .

According to him, another factor that affects the market is the reduction of production by OPEC+ countries, which began on May 1.

“In total, together with Russia, these voluntary reductions should remove from the market 1 million 660 thousand barrels per day, but so far it does not affect the real balance of supply and demand, because only a few days ago this program began to operate,” – concluded Yushkov.

Earlier it became known that Brent oil traded below $75 per barrel for the first time since March 27

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