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OIL PRICES DROPPED AGAINST FEAR OF GLOBAL RECESSION, EASE OF GASOLINE PRICES IN US AND OPEC DECISION TO INCREASE SUPPLY

Harvest Global Markets :

Oil prices rebounded 3% on Wednesday’s Asian session as investors are cautious on supply concerns as worries about global recession linger. OPEC secretary’s comments on Tuesday suggested that the industry hit with “Under siege” due to the years of under-investment, could ease the problem if there are extra supplies from Iran & Venezuela.

Former President of Russia, Dmitry Medvedev warned oil prices to sky rocket if Japan cap buying price to half percent from Russia, indicating prices to hit above $300/barrel. On the other side, Norwegian government on Tuesday intervened in petroleum sector problem to end the strike that had cut oil & gas output, labor ministry said. Such a move can limit worsening Europe’s energy crunch.

There is a worry about global recession as the largest economy (USA) posted economic fall out in the 2nd quarter of 2022. That would be the second consecutive quarter of economic contraction since the start of the year, could be considered as technical recession according to some sources..

With inflation at multi-decade highs, the pace of policy-tightening is not expected to let up in the second half of 2022. More than 5 million barrels of oil that were part of a historic U.S. emergency reserves release to lower domestic fuel prices were exported to Europe and Asia last month, according to data and sources, even as U.S. gasoline and diesel prices hit record highs.

US president Joe Biden is looking to lower record jump in gasoline prices, controlling the export of crude and fuel. He also called gasoline suppliers on Saturday to cut their prices to limit upside movement due to global supply disruption and surge in super commodity cycle.

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