Jakarta –
World oil prices fell as much as 10%. The decline pushed world oil prices below US$ 100 or equivalent to Rp. 1.49 million (exchange rate of Rp. 14,900/US$) per barrel.
Quoting from CNBC, Wednesday (6/7/2022) West Texas Intermediate (WTI) crude oil fell 8.24%, or US$ 8.93, to US$ 99.50 per barrel. Then it fell again 10%, now the price is at the level of US$ 97.43 per barrel.
Meanwhile, Brent crude oil closed down 9.45%, or US$ 10.73. The price is now at the level of US $ 102.77 per barrel.
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Energy research company, Ritterbusch and Associates attributed the decline in world oil prices to global recession sentiment. It is feared that the recession will reduce world oil demand, including other oil products.
Meanwhile, financial firm Citi predicts that Brent oil could drop to US$65 by the end of this year if a recession does occur. The decline was in line with the impact of the recession itself.
“In a recession scenario with rising unemployment, household and corporate bankruptcies, commodities will chase a downward cost curve as costs deflate and margins turn negative to push supply curbs,” the company wrote in a note to clients.
This decline in oil prices has just occurred, while previously prices continued to increase. The increase was caused by Russia invading Ukraine.
Even before this incident occurred, the price of oil had also increased. However, it only increased when the war actually happened.
The war between Russia and Ukraine is feared to reduce oil supplies to various countries. What’s more, Russia is a major commodity supplier, especially to Europe.
Previously, WTI briefly surged to a high of $130.50 per barrel in March, while Brent was near $140. That was the highest level for any contract since 2008.
Due to the high price of oil, the impact is that gasoline prices are expensive. The national average gasoline price hit a high of US$ 5,016/gallon on June 14.
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