Amid Recession Fears Crude Oil Declines As USD Gains Further Strength

Amid Recession Fears Crude Oil Declines As USD Gains Further Strength

January 10, 2023 0 By Wiley McDermott

Despite the fact that at the start of 2023, Gold and USD both have shown great signs of strength and achieved exceptional bullish runs. But the fears of upcoming economic recession are real, and they can flip the forex market upside down anytime.

Where USD and gold managed to go upward, crude oil prices further declined. On Wednesday, 4th of December 2022, the price of crude oil slipped, USD on the other end showed great strength.

The biggest reason crude oil had a sluggish start is rising inflation fears, and the USD has shown a strong bullish rally.

Elsewhere, Japan is also struggling to maintain its industrial stability, and Chinese markets are once more forced to close down due to the intense Covid-19 casualties.

Experts, as of now, are skeptical that crude oil demand will increase in the market in 2023. China is the biggest crude oil importer.

Economic indicators show that Chinese economic growth for FY 2023 will be slower than the growth of the international economy.

This is not a good sign for those countries that export crude oil, including Russia and the entire gulf.

The decline in Crude Oil Demand Will Also Have an Adverse Impact on Energy Stocks

Stock experts looked worried as the news emerged that the demand for crude oil would not rise in 2023. CNBD stock experts have said that 2023 might be similar to 2022 for the energy sector.

Talk of Crude oil, its price slipped the two-week low as trade returned today. The overall market trend was unstable as the recession talks grew strong.

Rumors are also circulating that the central banks will raise their policy rates and make other harsh decisions to avoid another economic recession.

Before today, crude oil was being traded at US$ 76.80 bbl. But after today, its price has gone down to US$ 76.55.

Compared with crude oil, USD stood stronger, and gold showed the biggest price hike as its new price is US$ 1,850 an ounce.

As New York’s money market closed, the US dollar bagged its biggest gain of 2023 as its price surged by 1.15% over the past 24 hours.

The US dollar has not only gained against crude oil but also remained strong against other famous currencies.

New York Market Also Declined Amid the Recession Talks

As the price of Tesla and Apple shares tumbled, the overall market cap of the New York market declined.

Some major stock indexes, such as the S&P500, the Dow Jones, and NASDAQ, all declined by -0.03%, -0.40%, and 0.76%, respectively.

Talk of the future of the stock and money market is concerned. The future of these markets is rigidly knotted with the overall economic outlook.

The former fed rep further added to the mounting worries that recession talk is very much on the cards of the feds.

Despite the fact that federal officials are doing their best to avoid the recession and keep the market stable, market stability is linked to global economic performance.

Regarding the global markets, Australia’s ASX 200 and Hong Kong’s HIS experienced gains, and Japan’s (JP) declined slightly.

Talking of the currencies, GBP, Euro, Japanese Yen, and AUD was amongst the biggest looser today.

The global outlook shows that the upcoming economic recession is not the only impact that will reshape the market outlook.

Troubles over China’s Covid-19 lockdown policy, a boycott of Russia’s crude oil, and the European energy crisis, as long as these issues will remain unresolved forex market will remain vulnerable.

The technical look at Crude oil price performance shows that its current WTI stands at 76.19. If crude oil fails to maintain this level, its price will go further bearish in both: the short and long term.

As bearish momentum is continuously rising on crude oil, experts do believe that investors should not have any high hopes for the price performance of crude oil. Investing in crude oil currently is a risky decision to make.