Oil Capitulates On Global Recession Fears

Breaking through new technical levels, Brent crude has plummeted nearly 4.6%, below $90, and WTI has plunged to $82, shedding over 5%, as fears of global recession appear to be driving the oil markets into a longer-term spiral downwards. 

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. 

Oil prices dropped more than 5% on Wednesday, falling to just over $80 per barrel and hitting their lowest point since January as rising fears that a global economic downturn will hurt demand weighed on energy markets.

The price of international benchmark Brent crude, meanwhile, fell below $90 per barrel for the first time since early February, now trading at just over $88.

Oil prices were unable to rally on Wednesday—continuing a recent slide—despite some recent bullish developments, including Russia keeping the Nord Stream pipeline offline and OPEC+ cutting production.

Oil and gas stocks are set to get a boost from heightened tensions surrounding Russian gas supplies to Europe, according to one analyst.

Oil

Kenny Polcari, chief market strategist at SlateStone Wealth, told CNBC’s “Street Signs Asia” that investors should zoom in on big U.S. energy names which are also good dividend payers.

One stock he named is up 125% this year, and he says there’s more “room to run.”

Oil prices fell on Wednesday following more Covid curbs in China and expectations of more interest rate hikes globally.

The U.S. West Texas Intermediate futures fell 1.45% to stand at $85.62 per barrel, while Brent crude futures slid 1.14% to $91.77 per barrel, erasing earlier gains following the latest OPEC+ meeting and its decision to pare output.

A Reuters forecast expects WTI to extend its downtrend to reach $83.17 per barrel. 

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