Oil prices plunged below $70 per barrel for the first time since 2021 on Tuesday, driven by growing concerns over slowing global economic growth. Brent crude, the global benchmark, fell by more than 3% to dip under the $70 mark, while U.S. West Texas Intermediate (WTI) dropped over 4% during trading.
Thank you for reading this post, don't forget to subscribe!According to Tamas Varga, an analyst at PVM Oil Associates, a minor revision of oil demand forecasts by OPEC contributed to the price drop, but the main factors were China’s economic struggles—particularly a 7% drop in August crude oil imports—and expectations that the U.S. Federal Reserve will cut interest rates by only 0.25% next week.
Swissquote analyst Ipek Ozkardeskaya added that despite factors like potential interest rate cuts and OPEC+ holding back on production increases, the oil market remains under strong downward pressure, as traders hesitate to go against the trend.
U.S. Stock Markets See Mixed Results as Interest Rate Speculation Grows
Meanwhile, U.S. stock markets showed mixed performances as traders weighed the outlook for interest rates ahead of Wednesday’s consumer inflation data release. The Dow Jones Industrial Average dropped 0.2%, while the S&P 500 gained 0.5%, and the tech-heavy Nasdaq Composite Index rose by 0.8%.
Investors are closely watching the Federal Reserve’s upcoming decision, which is expected to include an interest rate cut, though debate remains whether the cut will be 25 or 50 basis points. Russ Mould, investment director at AJ Bell, suggested Wednesday’s U.S. inflation data could significantly impact market sentiment.
Fresh concerns over China’s economy and ongoing political developments in the U.S., including the upcoming debate between Kamala Harris and Donald Trump, further added to market uncertainty.
Key Market Figures as of 2030 GMT:
• West Texas Intermediate: DOWN 4.3% at $65.75 per barrel (close)
• Brent North Sea Crude: DOWN 3.7% at $69.19 per barrel (close)
• Dow: DOWN 0.2% at 40,736.96 points (close)
• S&P 500: UP 0.5% at 5,495.52 (close)
• Nasdaq Composite: UP 0.8% at 17,025.88 (close)
• London FTSE 100: DOWN 0.8% at 8,205.98 (close)
• Paris CAC 40: DOWN 0.2% at 7,407.55 (close)
• Frankfurt DAX: DOWN 1.0% at 18,265.92 (close)
• Tokyo Nikkei 225: DOWN 0.2% at 36,159.16 (close)
• Hong Kong Hang Seng Index: UP 0.2% at 17,234.09 (close)
• Shanghai Composite: UP 0.3% at 2,744.19 (close)
• Euro/dollar: DOWN at $1.1023 from $1.1041 on Monday
• Pound/dollar: UP at $1.3083 from $1.3075
