Oil decreases due to fears of recession and growing U.S. reserves

On Thursday, the price of WTI oil fell below $79 per barrel. It happened after a nearly 1% reduction on Wednesday. The decrease was caused by the negative dynamics of retail sales in the U.S. That situation raised concerns about a possible recession. As the American Petroleum Institute reported, the country’s reserves of black gold increased by 7.6 million barrels. 

According to head of economics and strategy at Mizuho Bank Ltd. Vishnu Varathan, now it seems that the prices reached the local high, and a small correction is possible. The signs of the stockpiles’ growth and weak U.S. data should restrain and not frighten the oil market, as it interprets the reports of IEA and OPEC with optimism.

Confirming the bullish forecast of the organizations mentioned above, Saudi Aramco stated that it is positive about the growth of oil consumption. It will occur as the Chinese economy recovers and the number of air travel increases. Also, traders expect information concerning the future of Russian production and oil export when the sanctions on petrochemicals will come into force in early February.