[Asia Economy New York=Special Correspondent Joselgina] As concerns over an economic recession grow, international oil prices have returned to levels seen before Russia's invasion of Ukraine in February.
On the 4th (local time) at the New York Mercantile Exchange (NYMEX), the price of West Texas Intermediate (WTI) crude oil for September delivery closed at $88.50 per barrel, down $2.12 (2.3%) from the previous session. This is the first time in about six months since February 10, before the Ukraine invasion, that the WTI price has closed below $90 per barrel.
On the same day, Brent crude for October delivery traded on the London ICE Futures Exchange also fell to as low as $93.20 per barrel during the session. This is also the lowest price since February 21.
The return of international oil prices to pre-Ukraine war levels is interpreted as a result of heightened concerns about economic recession or slowdown in major countries including the United States. The successive interest rate hikes by central banks around the world have further increased these concerns. Following the U.S. Federal Reserve's two consecutive 'giant steps' (0.75 percentage point rate hikes), the Bank of England (BOE) also implemented a 'big step' (0.5 percentage point hike) for the first time in 27 years on this day.
Earlier, OPEC Plus (+) oil-producing countries decided to increase production by only 100,000 barrels per day in September, a smaller increase than previously planned, which is interpreted as reflecting expectations that energy demand will decline amid economic slowdown.
Additionally, news last week that U.S. crude oil inventories unexpectedly increased also put downward pressure on oil prices that day. According to data from the U.S. Energy Information Administration (EIA), weekly crude oil inventories as of the 29th increased by 4.467 million barrels compared to the previous week, contrary to the expected decrease.
Sevens Report Research stated, "Recent oil price movements suggest that demand concerns are overwhelmingly influencing the global energy market," and "For the oil market to find a short-term bottom, there needs to be signs that demand is stabilizing."
Meanwhile, international gold prices recovered to the $1,800 per ounce level, supported by declines in the U.S. dollar value and U.S. Treasury yields. On the same day at the New York Commodity Exchange, December delivery gold closed at $1,802.50 per ounce, up 1.4% ($25.80).
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