Home » Heating oil prices fall like a stone – oil prices continue to collapse

Heating oil prices fall like a stone – oil prices continue to collapse

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Heating oil prices fall like a stone – oil prices continue to collapse

Oil prices fell to their lowest level in 16 months on Monday. This is due to concerns in the global financial markets that risks in the global banking sector could cause a recession. This would lead, among other things, to a drop in fuel demand and thus in oil consumption. Brent crude prices fell $2.08, or 2.9%, to $70.89 a barrel in ongoing trade on Monday afternoon. This is the lowest price since December 2021.

According to the surveys by the esyoil heating oil portal, heating oil costs 97.31 euros per 100 liters on Monday afternoon on average – and prices continue to fall. In some federal states, heating oil prices are now just over 93 euros per 100 liters.

The collapse in oil prices comes despite a historic deal in which UBS, Switzerland’s largest bank, will buy the country’s second-largest lender, Credit Suisse, in a bid to stem the spread of a banking crisis. Following the announcement, the US Federal Reserve, the European Central Bank and other major central banks pledged to improve market liquidity and support other banks.

According to a Reuters survey, economists expect the US Federal Reserve to hike interest rates by 25 basis points on Wednesday (22/03) despite the turmoil in the banking sector. But voices are growing, saying the Fed should pause monetary tightening for now but be ready to hike rates again later, Reuters reports.

A slowdown in rate hikes is likely to weaken the dollar, making commodities like crude oil more affordable for buyers. The analysts at the major bank Goldman Sachs lowered their price forecasts for Brent crude oil after prices had recently plummeted due to fears of a recession. Goldman Sachs now expects Brent to average $94 a barrel over the next 12 months and around $97 a barrel in the second half of 2024, compared to $100 previously.

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Another bearish factor for crude oil was also the monthly report from the International Energy Agency (IEA) last Wednesday that global crude oil supply would “comfortably” exceed demand for the first half of this year. The IEA said global oil inventories rose 52.9 million barrels to 7.8 billion barrels in January, the highest in 18 months.

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