ACRA: Decline in oil prices due to situation in global economy
Baku, Azerbaijan, Dec. 27
By Taleh Mursagulov - Trend:
The current decline in oil prices is not so much related to the oil market as with the overall situation in the global economy and with financial markets, Deputy Director of Russia’s Analytical Credit Rating Agency (ACRA) Vasily Tanurkov told Trend Dec. 27.
“We shouldn’t forget that oil, among other things, is an exchange asset that is affected by changes in financial markets as a whole,” he said. “The situation in financial markets is very alarming, as shown by the S&P 500 Index decline by 20 percent since the beginning of October.”
He said the fall in the US stock market intensified on the last Fed rate increase and statements about the plans for two more increases in 2019.
“High interest rates and expensive US dollar are already putting pressure on the US economy, plus worries about slowdown of economy in China are growing,” he noted. “All this leads to the flight from risky assets, including oil.”
Oil prices switched to a sharp decline after renewing a four-year record of $86.7 per barrel in the beginning of October 2018. On Dec. 27, as of 17:45 (GMT +4), the price of Brent crude oil was $53.11 per barrel.
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