Fakoyejo OlalekanBrent crude oil fell on Wednesday below $100 after trading above the level since April last year. The depreciation in its price was driven by projected global recession in light of soaring inflation.
The commodity dip to $99.78 per barrel after concerns over impending recession slows demands for crude oil, compelling sellers to bring down their asking price in the global market.
During trading hours, the United States’ West Texas Intermediate (WTI) mirrored the brent crude downward path, slumping -3.2% to sell at $96.31, although the commodity is now up at $98.27, while the brent is around $100.3 at the time of filing this report.
The fall in brent oil price follows forecasts from United States company, Citigroup, that the commodity will fall after describing the product as overpriced in the firm’s notice to the oil market.
Prime Business Africa had reported that Citigroup said brent crude should be selling around $70 per barrel, and not the over $100 traders currently sell a barrel for. In its oil market forecast, the company envisioned the price falling to $65 by the end of 2022.
It stated further that the commodity will depreciate in value to $45 per barrel by the end of next year, as buyers and investors will readjust their priorities in the face of out-of-control inflation and diminishing investment in the industry.
Although, Goldman Sachs disagreed with the notion, stating that brent crude oil will actually soar to $140 in H2, explaining that the recent pull back in oil value is an opportunity for investors to mop up oil in the market, cause it will skyrocket eventually before this year ends.
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