Oil prices settle lower, dollar edges down as US economy falls in recession

Economies.com
2022-07-29 06:29AM UTC

Oil futures tilted lower in Asian trade, while the dollar index slipped off September 2002 highs ahead of US data, and after the US economy officially fell in recession.

 

As of 06:18 GMT, US crude futures due in August fell 0.64% to $96.68 a barrel, while Brent September futures fell 0.63% to $101.90 a barrel, as the dollar index fell 0.30% to 105.90.

 

From the US, personal spending is expected up 0.9%, while personal income is expected up 0.5% last month.

 

US labor unit costs are expected up 1.1%, slowing down from 1.4% in the first quarter, while the UoM consumer confidence index is expected up slightly to 51.1 from 50.0.

 

US President Joe Biden said that latest US quarterly recession isn't surprising as the Fed is trying to control inflation, however he asserted his government was on the right path.

 

The US administration's new inflation reducing low will impose a 15% tax on international companies, however no taxes will be raised on those earning $400 thousand and lower.

 

The Federal Reserve decided to hike rates by 75 basis points to 2.5%, the highest since December 2018 as expected.

 

Currently, two-year US treasury yields stand at 3.203%, while 10-year yields hit 2.954%, such divergence is usually indicative of upcoming recession.

 

It was confirmed last week that US President Joe Biden got a positive Covid 19 diagnosis, with light symptoms.

 

Medical officials in the US warned from a new Covid 19 wave in the US and worldwide, one that's particularly virulent, and asserting the pandemic isn't over yet.

 

China last reported 1,012 new Covid 19 infections last Wednesday, and it's the first time infections surpassed a thousand cases since May.

 

Europe recently allowed several state-owned Russian oil companies to sell their products to several members of EU countries, however the US is seeking to put a limit on prices of Russian oil.

 

Baker Hughes data last week showed US oil rigs steadied at 599 rigs, the highest since March 2020, while rising in June for the 23rd month in a row.

 

US oil output on the other hand declined 100 thousand bpd last week to 12 million bpd, off April 2020 highs.

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