While the Dollar Strengthened; Oil Prices Declined Sharply

Dollar pressure caused a decline in oil - Oil prices fell today due to the risk of recession in the economy, the pressure caused by the strengthening of the dollar and the increasing Covid virus cases in China.

Increasing coronavirus cases in China have raised concerns about the global economic slowdown. However, with the increase in the dollar, oil prices fell sharply today. West Texas-type crude oil lost 5.5 percent during the day and fell below $ 100 per barrel. Brent crude oil futures fell 4.5 percent during the day to $102.32 per barrel. Declining liquidity left oil prices vulnerable to sharper movements. Brent oil futures showed the third largest decline in history in dollar terms last week. The downward trend spread across commodities as rising corona virus cases in China and inflation data to be announced soon in the US raised concerns about demand. The rapid rise of the dollar increased the pressure on oil. This reduced the attractiveness of oil for investors. It made it more expensive for emerging markets. Crude oil prices have been on a downward trend since early June as central banks aggressively raised interest rates to fight inflation and concerns flared that the United States could enter a recession. The Organization of the Petroleum Exporting Countries (OPEC) forecast for 2023 was that the tightness in the oil market would not ease. "In the West, the combination of high energy prices and rising interest rates is fueling concerns of a recession that will have a serious impact on oil demand," the German bank Commerzbank told Reuters.