Oil prices fell more than 4 percent on Wednesday afternoon. This is the first time since April that the price of oil has fallen below $100 a barrel.
The price of a barrel of North Sea oil is $99.13 at 4.20 pm, after a 4.83 percent drop so far today.
For the second day in a row, the sharp decline in oil prices began at 3:00 pm. The fall gradually increased over the course of the day.
Meanwhile, the price of US Light Sweet Crude (WTI) fell to $95.75 a barrel after a 3.76 percent drop.
The smell of raw materials
Bjarne Schieldrop, SEB’s director of commodities, explained on Tuesday that a number of industrial metals are declining sharply, and that this is affecting oil prices.
– It is not oil that is sold alone on new oil now. The head of the analysis department noted that there is a large-scale sale of raw materials, because there is a fear of an economic recession, and then you will not have raw materials.
He also referred to the stock market declines that contributed to the drop in oil prices. The main index in the Oslo Stock Exchange closed down 0.77 percent.
Recession and inflation
Louise Dixon, chief analyst at Rystad Energy, cites inflation and rising interest rates as reasons to increase the chance of a recession, and that this has implications for oil prices.
– Increasing chances of stagnation and rising prices will reduce the demand for oil, and thus reduce the price of oil, he says.
He accuses central banks of failing to catch up with inflation, and instead raising the risk of a recession.
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