Oil prices continue their downward streak as fears of the U.S. recession grip the global financial markets. The U.S. stock market has experienced bloodshed since Friday, falling nearly 5% in the last two trading days. Dow Jones, Nasdaq, and the S&P 500 have remained in deep red with little to no signs of a quick recovery.
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The crash ignited a domino effect that extended the fall into the commodity markets, gold, and currency. The oil market was also the hardest hit as prices decreased by more than 2% in the day’s trade.
Oil Prices Head Drastically South
West Texas Intermediate (WTI) oil prices tumbled by over 2.38% to $71.77 on Monday’s closing bell. In addition, Brent Crude dipped by 2.08% and fell to the $75.21 price range. Oil prices are experiencing high volatility, and investors are skeptical about taking an entry position.
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If the U.S. stock market opens in the red on Tuesday, oil prices are likely to fall below the $70 mark. This development could ring warning bells in the commodity markets, inadvertently affecting gold and the U.S. dollar.
Gold prices are on a downward trajectory and could slip below the $2,400 mark. The XAU/USD chart shows gold prices are down by more than seven points in the day’s trade.
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Additionally, the U.S. dollar is dangerously low, as the DXY index shows it falling to 102.99. Oil prices are interconnected with the commodity markets and play a vital role in the global market’s performance.
To add to the woes, the conflict between Israel, Palestine, and Iran is escalating, which could send oil prices reeling. The next few months could add further pressure on the oil and gas sector, and the risk could extend to the broader commodity markets.