WTI Oil Moves Below $80 On Recession Worries

Key Insights

• WTI oil is down by 6% amid global market sell-off. 
• Strong dollar and high Treasury yields put pressure on precious metals. 
• Copper, which is sensitive to economic outlook, tested new lows. 

WTI Oil Tests Multi-Month Lows

WTI oil settled below the $80 level and continues to move lower amid global recession worries.

Government debt yields rise at a robust pace in many parts of the world, so traders expect that most central banks will continue to raise rates aggressively to fight inflation.

Higher interest rates will put additional pressure on commodities, and traders move out of this market segment.

WTI oil managed to settle below previous lows and is heading towards the $75 level. RSI remains in the moderate territory, so there is enough room to gain additional downside momentum in the upcoming trading sessions.

Natural Gas Remains Under Pressure

Natural gas is currently trying to settle below the $7.00 level as pullback continues. The recent EIA report was bearish and put material pressure on natural gas markets.

Today’s sell-off in commodity markets served as an additional negative catalyst for natural gas. In case this global sell-off continues, natural gas will have a good chance to get to the test of the $6.50 level.

Silver Declines Below $19.00

Silver found itself under strong pressure and moved below the $19.00 level amid recession worries. Platinum and palladium, which are sensitive to industrial demand, have also suffered strong sell-offs. Platinum declined towards the $850 level, while palladium settled back below $2100.

The sell-off in gold markets was not that strong, but gold tested new lows near the $1650 level. The strong rally in the U.S. dollar and new highs in Treasury yields were the main catalysts for gold’s weakness. Strong dollar and high yields are bearish for gold that pays no interest. At this point, there is no safe-haven demand for gold, and it looks that all the money moves into the U.S. dollar.

Copper Slides On Recession Worries

Recession worries have finally put material pressure on copper, which was trying to stabilize near the $3.50 level in recent trading sessions. Currently, copper is trying to settle below $3.35.

Copper markets are sensitive to economic outlook, so copper may gain significant downside momentum in case recession worries continue to grow.

For a look at all of today’s economic events, check out our economic calendar.