But the U.S. is still producing encouraging economic indicators: File Image/Pixabay
Another day, another round of losses for crude, this time due to a second week of unexpected rises in U.S. crude inventories, the threat by China on Thursday to impose counter-measures in retaliation for the latest U.S. tariffs on $300 billion of Chinese goods, and the U.S. Treasury bond yield curve inverting for the first time since 2007.
Brent on Thursday fell by $1.81 to $57.67 per barrel, while West Texas Intermediate was down 75 cents to $54.48.
In what could be the understatement of the year, Tamas Varga, analyst at PVM Oil Associates, remarked, "The market is becoming very anxious about global growth."
Putri Pascualy, managing director, PAAMCO Prisma
Yes, worrying about the recession may actually bring one about
Emma Richards, senior industry analyst at Fitch Solutions, said markets have become "incredibly sensitive to any kind of bearish indicator," and she added that in order for prices to be pushed up, it would take the Organization of the Petroleum Exporting Countries (OPEC) to cut supply by another 1 million barrels per day (bpd): "Whether or not they can build consensus for that is another question."
But for every warning of an imminent recession, there is reason to believe an economic contraction and little else is currently taking place - at least in the U.S.
Putri Pascualy, managing director of PAAMCO Prisma, said, "Despite the current worries about an impending recession, the inverted yield curve can be either a symptom or a cause of the recession."
Pascualy went on to note that, "Yes, worrying about the recession may actually bring one about, [but] despite the slower global growth, growth is still positive."
Additionally, the credit spread is not forecasting a recession, job growth has been steady, and the manufacturing sector is still in the growth margins.