Oil prices dropped yesterday as concerns of a sharp economic slowdown outweighed supply disruptions from OPEC’s production cutbacks and U.S. sanctions on Iran and Venezuela.
On the strength of that the Brent crude oil futures were at $66.52 per barrel down 51 cents, or 0.8 per cent, from their last close, while U.S. West Texas Intermediate (WTI) futures were at $58.42 per barrel, down 63 cents, or 1.1 per cent, from their last settlement.
Both crude oil price benchmarks have slumped by more than 3 per cent since last week hitting their highest since November 2018. Concerns about a potential U.S. recession resurfaced late last week after bearish remarks by the U.S. Federal Reserve sent 10-year treasury yields to the lowest since early 2018.
In response, 10-year treasury yields slipped below the three-month rate for the first time since 2007. Historically, an inverted yield curve – where long-term rates fall below short-term – has signalled an upcoming recession.
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