Oil prices on Wednesday, October 13, stabilised after hitting multi-year record highs and gaining consecutively in the past few weeks. With a turbulent session on Tuesday, the oil prices raised concerns over hindering growth as global economies are on a course to recovery from the COVID-19 pandemic.
Benchmark Brent crude fell 71 cents to settle at $82.72 a barrel after hitting $84.60 on Monday, the highest since October 2018, continuing its streak of decline after falling 23 cents on Tuesday. Meanwhile, U.S. West Texas Intermediate crude futures (WTI) fell 71 cents following a gain of 12 cents in the Tuesday session to settle at $79.93 a barrel, after ranging between $81.62 and $79.47.
Both Brent Crude and WTI have been on a continuous price rise as demands surged amid the global supply shortage of energy fuel to support the fast recovering economies. Brent has risen for five consecutive weeks, while WTI has recorded seven straight weeks of gains. Both contracts have risen by more than 15 per cent since the beginning of September.
The supply chain disruption of Natural Gas and thermal coal recorded around Asia and Europe have led to their prices soaring which in turn are expected to rapidly raise the demand for alternate fuels such as diesel and fuel oi, ANZ Research analysts speculated, citing concerns that the cycle will stoke inflation and the struggling economies will be weakened further.
After analysing global trends, the International Monetary Fund has reduced its growth outlooks for the United States and other industrial powers. The IMF has cut down its 2021 global growth forecast to 5.9 per cent from the 6.0 per cent projection it made earlier this year in July. However, It left the 2022 global growth forecast unchanged at 4.9per cent.
