OIL
Brent oil prices fell during early Friday trading. It has been the worst week for the price of the barrel since late January, with prices down more than 5.5%. The prospect of an economic contraction became more real this week, following the testimony of the Chairman of the Federal Reserve in front of US law makers. Jerome Powell’s stance was very hawkish and the markets are now pricing-in steeper rate hikes, and also a higher terminal rate, which could reach 6%. As a result, the chances of a recession - and therefore lower oil demand - increased causing a drop in the price of the barrel as traders start to price-in the economic contraction, that may result from the tightening of monetary policy in the United States.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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