InvestorQ : Why did the crude oil prices fall so sharply in the last two days to around $37/bbl?
Deepa Salunkhe made post

Why did the crude oil prices fall so sharply in the last two days to around $37/bbl?

Answer
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diksha shah answered.
3 months ago


After days of upside movement, crude oil prices in the Brent market cracked sharply on Thursday by more than 10% to touch $37.3/bbl. One reason for the sharp fall in oil was the higher than expected US oil inventories which rose by 5.7 million barrels to 538 million barrels. However, the actual reason for the oil prices falling was the extremely negative guidance of (-6.5%) contraction in US GDP. In its policy announcement, the Fed warned of weak growth and also of unemployment at 9.5%. This is the highest level of joblessness in the US in several decades. That is not good news for oil demand since the US is the largest consumer of oil and the crude markets were reacting to this grim outlook for growth given by the US Fed. That had a negative impact on almost all the asset classes and oil was no exception.