thetechxp is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission.

Latest: Oil drops to 12-wk low on recession, COVID-19 worries


Reuters, NEW YORK, July 6 – Oil prices plunged to a 12-week low in choppy trade on Wednesday, compounding Tuesday’s significant losses as supply concerns were overcome by mounting concerns about the destruction of demand from a worldwide recession.

By 10:57 a.m. EDT (1457 GMT), Brent futures for September delivery had down $2.99, or 2.9 percent, to $99.78 per barrel, while U.S. West Texas Intermediate (WTI) oil had dropped $3.19, or 3.2 percent, to $96.31.

With Tuesday’s Brent decline of 9% and WTI decline of 8%, WTI and Brent are on pace for their lowest finishes since April 11.


In addition, it put both benchmarks in technically oversold territory, with an RSI below 30 for the second straight day. Brent would be in oversold territory for two days for the first time since December 2021 if it finishes at that level.

The oil sell-off, according to investment firm Goldman Sachs, was sparked by escalating recessionary fears.

As investors flocked to safe-haven paper due to growing concerns about a dimming economic outlook, Germany’s government borrowing prices dropped to a five-week low.


As investors awaited the minutes from the Federal Reserve meeting to assess the state of the economy and the rate at which interest rates will be raised to combat rising inflation, U.S. market indices declined on Wednesday. View More

The soaring U.S. dollar, which increased to a close to 20-year high versus a basket of other currencies, also contributed to the decline in oil prices.

Oil becomes more expensive for holders of foreign currencies when the U.S. dollar rises, which may reduce demand.


The market in China, the largest oil importer in the world, was concerned that new COVID-19 lockdowns might reduce demand. View More

While this was happening, China’s imports of Russian crude oil surged by 55 percent from a year earlier to a record level in May. As refiners profited from discounted supplies in the face of sanctions on Moscow over its invasion of Ukraine, Russia displaced Saudi Arabia as the leading supplier. View More

The news that all oil and gas fields impacted by a strike in Norway’s petroleum sector are anticipated to resume full operations in a few days contributed to the decline in oil prices, according to Equinor ASA (EQNR.OL). View More


Following negotiations with U.S. ally Qatar on easing stalled efforts to resuscitate a 2015 nuclear accord, Iran declared that it wants a strong and long-lasting nuclear agreement with world powers. View More

A nuclear agreement with Iran, according to analysts, could increase the supply of crude oil by around 1 million barrels per day (bpd).

On Wednesday, the economy was erratic. On supply fears, both averages had earlier gained more than $2 per barrel.


The Caspian Pipeline Consortium (CPC), which transports oil from Kazakhstan to the Black Sea, was ordered by a Russian court to halt operations for 30 days. However, sources claimed that exports were still occurring. View More

In another part of Kazakhstan, an explosion at the enormous Tengiz oilfield left two workers dead and three more injured.

The Organization of the Petroleum Exporting Countries’ (OPEC) departing secretary general, Mohammad Barkindo, passed away at the age of 63. View More


Rowena Edwards in London, Emily Chow in Kuala Lumpur, and Arathy Somasekhar in Houston contributed additional reporting; David Clarke, David Goodman, and Deepa Babington edited the material.

Leave a Comment