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Oil prices dipped in early trade on Tuesday as recession worries dominated headlines from the World Economic Forum conference in Davos, eroding the market’s confidence about a fuel demand recovery in top oil importer China, which fueled the market last week.
Brent oil futures were down 38 cents, or 0.5%, at $84.08 at 0114 GMT, extending the previous session’s 1% decline.
West Texas Intermediate (WTI) crude futures in the United States fell $1.16, or 1.5%, from Friday’s closing to $78.70. There was no settlement on Monday since it was Martin Luther King Day in the United States.
In a pessimistic study issued at the Davos conference, two-thirds of private and public sector experts questioned projected a worldwide recession this year, with approximately 18% thinking it was “very likely.”
At the same time, PwC’s survey of chief executives revealed the most pessimistic results since the business began conducting the poll a decade ago.
“Brent crude has gained nearly 10% over the past 10 days as optimism over China’s reopening boosted sentiment. “However, the outlook for the rest of the global economy is uncertain,” ANZ commodity analysts said in a client note.
According to ANZ, a surge in Russian oil production is also impacting the market, with seaborne shipments reaching 3.8 million barrels per day last week, the highest level since April.
According to Reuters, at least four Chinese-owned supertankers were delivering Russian Urals crude to China, and a fifth supertanker was shipping crude to India, with the oil available at a discount following the Group of Seven (G7) nations’ imposition of an oil price restriction.
The dollar’s recovery from seven-month lows weighed on oil prices, since a stronger greenback makes oil more costly for people holding foreign currencies.