Oil prices fall below $100 per barrel on global recession fears: Will it dip further?
NEW DELHI: Oil prices could fall as low $65 a barrel by year end and potentially hit $45/bbl by end-2023 if a recession hits developed economies like the US and Europe, with rising unemployment, household and corporate bankruptcies, warned Citigroup in a research report. In a recession, surpluses of energy typically build up, forcing sellers to cut prices sharply to sell their product.
The outlook is based on an absence of any intervention by OPEC+ producers and a decline in oil investments.
The benchmark Brent crude is trading at $99.41 per per barrel at present, after shooting up to $128 in early March because of the Ukraine war. It was prevailing at around $97 a barrel before Russia’s invasion of Ukraine. Investors have sold oil positions on worries that aggressive interest rate hikes to stem inflation will spur an economic downturn that will hit oil demand.
