Global Oil Prices Plummet Amid Economic Concerns
On September 4, 2023, world oil prices reached their lowest levels since the start of the year, with Brent crude falling by 1.5% to $72.64 per barrel and WTI dropping by 1.6% to $69.19 per barrel. This decline follows a significant drop in commodity prices of over 5% the previous day, a reaction attributed to worsening economic indicators in the United States. Experts, including Lyudmila Rokotyanskaya from BCS World of Investments, suggest that weak manufacturing data and a liquidity outflow from the stock market are major contributing factors.
Manufacturing PMI Signals Economic Slowdown
The latest data from S&P Global indicates that the U.S. manufacturing PMI fell to 47.9 in August, marking the lowest point in eight months. A PMI below 50 signals negative trends, and according to Chris Williamson, chief business economist at S&P Global Market Intelligence, this decline points to manufacturing becoming a significant drag on the economy. The report highlights a concerning drop in orders and an increase in inventories, which could signal deeper issues ahead.
OPEC+ Intervention Likely as Prices Continue to Fall
If the downward trend in oil prices persists, OPEC+ countries may intervene to stabilize the market. Analysts, including Vladimir Chernov from Freedom Finance Global, predict that if Brent prices remain below $75-77, OPEC+ may consider reducing production quotas or delaying planned increases. This intervention is crucial, as OPEC+ has historically acted to prevent significant price drops, ensuring the stability of the oil market amidst fluctuating economic conditions.
