WTI pressured on risk aversion after CPI data

The West Texas Intermediate crude oil is under pressure during the US trading session following US hot inflation reading release that has caused risk aversion across financial markets.

At the time of writing, WTI is down around 0.6% is recovering to the $88.28 high after managing to rise from earlier fresh 85.56 low.

Before the CPI print, the price of oil was already under pressure due to the International Energy Agency’s warning last week’s two-million-barrel-per-day production cut by OPEC+ threatened to tip the global economy into recession.

The agency has lowered its demand forecast for the remainder of this year and 2023. In its influential monthly Oil Market Report, the IEA said OPEC+ supply cuts “may prove the tipping point for a global economy already on the brink of recession.”

Energy supply risks are rising, with an Iran deal far from realizing, Russian production starting to slump at a faster clip, the US SPR releases set to grind to a halt and EU sanctions on Russian crude coming to effect next December.