Oil Prices Slide to Three-Week Low Due to Economic Worries

Global Economic Concerns Prompt Sharp Decline in Oil Prices.

Oct 4, 2023 - 09:32
Oct 4, 2023 - 09:33
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Oil Prices Slide to Three-Week Low Due to Economic Worries
Oil Prices Slide to Three-Week Low Due to Economic Worries

The price of oil is going down because of concerns about the world economy. This is happening even though Saudi Arabia and Russia said they will keep producing less oil until the end of the year. A kind of oil called West Texas Intermediate (WTI) dropped to about $87 for one barrel. This is the lowest it has been since September 11. The drop in prices is because people expect that the global interest rates will stay high, and this is making it hard for the price of oil to go up.

Some new information shows that in the U.S., companies added the fewest number of jobs since the beginning of 2021 in September. This means that companies are not hiring as much as before. This could be a sign that the job market is slowing down. Experts thought there would be more jobs added.

Even though Saudi Arabia and Russia said they will keep producing less oil, the price of oil is still going down.

Since June, the price of oil went up because some countries agreed to produce less oil. This made it harder to find oil, and so the price went up. But now, some people are worried because they think the U.S. might keep increasing the interest rates. This makes the U.S. dollar stronger, and when the dollar is strong, buying things like oil gets more expensive. Also, when U.S. Treasury yields go up, it affects the price of oil too.

A person named John Evans, who knows a lot about oil, said, "The US dollar is getting stronger, and because of what the banks are saying and doing to control inflation, the value of the dollar is going up. This will affect all markets, including oil."

In the U.S., people are also watching to see how much oil is stored in a place called Cushing, Oklahoma. This place is important for storing oil. The latest information shows that even though there was a bit more oil stored in Cushing last week, overall in the U.S., less oil was stored. Also, an important pipeline in the U.S. has been moving less oil this week.

Also Read: Crude Oil Prices Hold Steady Near $94 Amid Fed's Rate Hike Plans and Russian Export Ban

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