Jakarta, CNBC Indonesia – The International Monetary Fund (IMF), predicts the world economy will grow 3.6% for 2022. World oil prices also fell when the world economic outlook was more bleak.
Throughout this week, world oil prices fell 5%. Brent crude oil fell 4.52% compared to the previous week, closing at US$ 106.65/barrel. Meanwhile, light sweet oil or West Texas Intermediate (WTI) closed at US$ 102.7/barrel, down 4.56%.
At the beginning of this week, oil prices rose positively with gains for four consecutive days. On Monday (4/18/2022) world crude oil prices rose by more than 1%.
However, on the next trading day, world oil prices were “beaten” by the IMF. Two world oil price benchmarks, brent and light sweet or West Texas Intermediate (WTI) compact down 5..22% from the previous day’s position.
The market responded negatively to the latest International Monetary Fund (IMF) report. InWorld Economic OutlookIn the latest edition, the agency headquartered in Washington DC (United States/USA) predicts the world economy will grow 3.6% for 2022 and 2022, down 0.8 percentage points and 0.25 percentage points respectively compared to the previous projection.
“The outlook for the world economy has completely turned around, largely due to Russia’s attack on Ukraine,” Pierre-Olivier Gourinchas, IMF chief economist, said in the report.
The war, according to the IMF, creates disruptions on the supply side because Russia and Ukraine are major producers of a number of commodities. Starting from oil, natural gas, coal, wheat, soybeans, to sunflower seeds. In addition to the war, economic sanctions against Russia have also limited the supply of commodities to world markets.
The imbalance between supply and demand causes inflationary pressures that are felt all over the world. In turn, high inflation will ‘eat’ purchasing power thereby weakening economic growth.
“War causes a supply-side shock that has been experienced by the world economy in recent years. Like an earthquake, its effects will extend to commodity markets, trade routes and financial channels,” Gourinchas continued.
When the world economic outlook is more bleak, the market expects energy demand to also decrease. So naturally the price of oil goes down.
“The IMF report caused nervousness in the market,” said Phil Flynn, analyst at Price Futures Group, as quoted by Reuters.
In the future, world oil prices are expected to experience high volatility. This is because Market players are still very cautious in the midst of the development of the Russia-Ukraine conflict that could affect the supply and demand for world oil at any time.
“Trade will not be as easy as a few weeks ago. You have to be more willing to take risks,” said Phil Flynn, Senior Analyst at Price Futures Group, as quoted by Reuters.
(race / race)
–
