Oil, rose as high as $78 after Saudi Arabia’s supply-side decision over the weekend. However, negative data from the global economic calendar increased recession concerns, causing selling pressure in brent oil.
Brent oil, which started Monday with an increase of 0.32%, lost its value by 1.21% on Tuesday and Wednesday. With the sale coming today, black gold fell to $75.50 level.
Why Is Oil Falling?
Brent oil has been on a downtrend to date after reaching $130 last year due to the Russo-Ukrainian war. Analysts point to interest rate hikes and weak macroeconomic data as the most important reason for the decline.
With the end of the pandemic process, central banks turned their attention to inflation. FED, which started interest rate hikes in March 2022, increased the funding rate from 0.25% to 5.25%. Although the rise in interest rates was a cure for the inflation problem, it led to an increase in growth-oriented concerns. The IMF predicts that global growth, which was 3.4% last year, will decline to 2.9% in 2023.
The US Energy Information Administration (EIA) commented yesterday that American oil production will increase faster than demand.
Some data that emerged this week may have caused the continued selling pressure in oil:
- Annual household spending in Japan, announced on Tuesday, was lower than expected at -4.4%.
- Industrial production data announced today in Germany remained weak with 0.3% despite the 0.6% increase expectation.
- Investors were worried about the export/import balance announced today in China. Annual exports of the world’s largest producer decreased by 7.5%.
Fuel Increases are at the Door!
Due to the active foreign exchange in our country in recent years, vehicle drivers follow oil prices closely. Although Brent oil depreciates, activity in foreign currency diesel And in gasoline may be a harbinger of new price hikes.
USD/TL The pair has moved up 10% since the beginning of the week. The US dollar is currently traded at the limit of 23 TL.
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