WTI retreats 4% on recession fears, demand issues

The WTI crude oil drops from daily highs of $86.40s to $82.20s on Tuesday. Chinese economic indicators remain delayed, with no rescheduling assigned by the government. The US will release oil from its SPR reserve to keep gasoline prices down.

The US crude oil declined more than 3% on Tuesday amidst a risk-on impulse on fears that a global economic slowdown might dent oil’s demand. At the same time, the delayed Chinese GDP data weighs on investors’ moods. At the time of writing, WTI is trading at $82.69 per barrel, losing more than 3%.

US equities are trading in the green territory, supported by corporate earnings. The delay of important Chinese data weighs on WTI traders’ mood, as speculation that growth could have weakened means less demand for black gold.

The US Biden administration plans to sell additional oil from the Strategic Petroleum Reserve (SPR) as the White House tries to control gasoline prices before November’s mid-term elections.

Meanwhile, on Tuesday, OPEC’s secretary general Haitham al-Ghais said that the cartel unanimously decided to cut oil output to prevent a crisis and stem a tide of volatility.