Weekly Oil Report: Markets Tremble Upon More Fears of A Recession

After weeks of the quick growth of crude, it drastically sold off during the last week. The oil price fell by around 8% and Brent settled at $113.14 and WTI got to $110.01 on Friday. Tensions existed in almost all the markets besides oil and petrochemical due to the reports on high inflation rates and the interest rate changes. WTI, as you can see in the 4h chart above, is hovering under a monthly pivot which is also a static resistance area. The price can come lower to about $106- $105 to the bottom line of the upward trend-the red line. If the resistance holds, the price can get back to its upward track. Price has already met the resistance 3 times and recovered back. Global markets are frightened by the empowering possibilities of a recession. The fear pulled down the price on Friday as well. The Fed's decisions have brought more fears to the market. While market participants were expecting a rise in rate by 50 basis points (bps) last week, the increase of 75 bps caused fluctuations in stocks and crude. The Fed is into battling inflation despite the costs of slower growth and higher unemployment. After about two years, the first oil cargo of Venezuela is exported to Europe. It indicated how critical is the situation for Europe in gas and oil imports. Although Russia is under sanction, the country is still exporting a huge amount of oil to Asia. It seems that Russia is already sending half of its oil to Asia, including China and India. Analysts doubt that Asia can have the whole proportion of Russia's output. Africa is also considering the chance to take part in the oil spree of Russia and Asia. The country might start importing Russian oil to curb the high prices of gas and oil. Gas and fuel price are still soaring in various regions. Consequently, the White House might restrict the fuel exports to get relative control over the price. The controversial trip of the US president to Saudi Arabia has been a concern to the democrat party recently. Biden will probably have his first trip to the Middle East as a president from July 13 to July 16. First, he will stop in Israel and then head to Saudi Arabia. Opponents of this trip believe that Biden should avoid Saudi Arabia because of its human rights violations. Biden is currently under the pressure of energy and fuel hiking prices; therefore, he might take the trip as an opportunity to tame the price. The volatile Dollar rates in different countries are still troubling Traders. The fluctuations continue as the Dollar value increases due to the increasing interest rate. Iran, moreover, is uncertain about export product prices and its national currency exchange rate. Luckily, Dollar/Rial exchange rate was more stable during the last week. The fear of recession or stagflation has caused a severe slowdown in the markets of Petrochemicals and bitumen. Monsoon of India has added up to the situation.