Oil prices continued to slide today, falling below $70 per barrel today, weighed down by growing concerns over the health of the US and Chinese economies.
WTI Crude dropped by 2.79 per cent to a new five-week low of $69.70 per barrel, while Brent Crude slipped 2.64 per cent to $73.33 per barrel.
This puts prices at their lowest levels since March and marks the biggest one-day percentage declines since early January.
A looming interest rate hike this evening from the US Federal Reserve (‘The Fed’) has seen both major benchmarks extend their losses in this morning’s trading after plunging five per cent in the previous session yesterday.
The Fed’s chair Jerome Powell is expected to raise interest rates, which are currently at 4.75 – 5 per cent, by a further 25 basis points.
Meanwhile, Chinese manufacturing activity fell unexpectedly in April. China is the world’s largest energy consumer and top buyer of crude oil, and its slow recovery from the pandemic has prevented oil markets from rallying.
OPEC is both bullish over a demand resurgence later this year, with oil markets also being boosted by the cartel’s swingeing cuts – but in the short term prices are being dictated by macroeconomic trends.