Crude oil benchmarks West Texas Intermediate and Brent saw prices gain as much as 5%, just two days after the resource had a selloff believed to have gone too far.
WTI previously plunged from a week-high of US$111.13 on Tuesday to US$98.44 just a day after as fears of recession fueled less demand in trading liquidity–marking its decline below the US$100-mark for the first time since May.
“We view this move as driven by growing recession fears in the face of low trading liquidity, with technicals exacerbating the selloff,” Goldman Sachs analysts wrote.
The analysts added that the selloff had overshot as “demand destruction through high prices is the only solver left as still declining inventories approach critically low levels.”
However, the oil prices rebounded today in the early trading “as investors returned their focus to supply constraints, outweighing fears of a global recession,” according to Nasdaq’s MarketInsite blog.
“The market is also keeping an eye out for possible oil disruptions at the Caspian Pipeline Consortium (CPC), which had been told by a Russian court to suspend activity,” the blog read. “In efforts to pressure Tehran to revive the 2015 Iran nuclear deal, Washington tightened sanctions on Iran.”
WTI front month rose by more than 5%, reaching as high as US$104.48, beating yesterday’s high. In a similar fashion, Brent also jumped by almost 5% after reaching below the US$100-mark yesterday.
Information for this briefing was found via Nasdaq and Market Watch. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.