Oil price falls in volatile week due to imbalance between supply and demand

Photo gallery. EFE / Larry W. Smith

Global oil prices fell five percent on Friday due to growing fears of a possible recession in the United States. And other countries, according to operators.

West Texas Intermediate fell 5.5 percent to $111.12 a barrel, and European benchmark Brent North Sea crude fell 5 percent.

in the meantime, Major indices of US stock markets acted with caution And they were barely moving on Friday morning, at the end of a busy Wall Street week.

Stocks suffered many crashes this week Markets are getting used to the bitter drug of high interest rates that the Federal Reserve and other central banks use in their fight against inflation.

Higher rates fight higher prices, but they also slow the economy and can cause stock and bond prices to fall.

FILE PHOTO: A banner on Wall Street in front of the New York Stock Exchange in New York City, New York, US October 2, 2020. REUTERS/Carlo Allegri
FILE PHOTO: A banner on Wall Street in front of the New York Stock Exchange in New York City, New York, US October 2, 2020. REUTERS/Carlo Allegri

at 10:20 (14:20 GMT), The S&P 500 advanced just 0.09%., but it was still down more than 5% for the week. for this part, The Dow Jones Industrial Average lost 0.13%.while heTech earnings boosted the Nasdaq by 0.72%..

The three indices are on their way to close a new week with lossesafter the past was already one of the worst in months, when it was announced US inflation rose in May to 8.6%three tenths higher than in April, and Highest in 40 yearsThis is mainly due to the sharp rise in energy prices.

“Central banks, who have been our friends for so long, are telling us to expect pain.”PineBridge Investments, Head of Investment Portfolio, reassured, Hani RedaQuoted from the newspaper The Wall Street Journalreferring to the interest rate increases made by both the Federal Reserve and the European Central Bank, which will raise them in July and September, or the Bank of England.

Professor at The Wharton School of Business Jeremy SiegelCNBC, for his part, confirms this The US economy is already in a “mild recession”.

“It’s not a formal recession by NBER standards, certainly not yet, but this first half saw negative GDP growth and ends in a slump,” he said.

NBER is considered slack when there Significant drop in GDP lasting ‘more than several months’.

(With information from the AFP, EFE, and AP)

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