Oil pares advance, taking a breather after monster rally pushes crude near $120
Oil prices on Monday had pared a massive advance in a roller-coaster session that initially saw them soar to near $120 a barrel amid panic over supply disruptions from the Iran conflict.
A report about G7 countries discussing a possible joint release of emergency reserves calmed nerves, News.Az reports, citing CNN.
Brent oil futures for May initially surged over 30% to a peak of $119.50 a barrel, while West Texas Intermediate crude futures jumped as much as 30% to an intraday high of $119.43 a barrel earlier in the day.
At 14:44 ET (18:44 GMT), Brent was last up 7% to $99.11 a barrel, while WTI was up 4.4% to $94.91 a barrel.
"We’ve now entered a one-dimensional market where the trajectory of crude prices outweighs everything else, from earnings to economic data. For this reason, we cannot rule out further price extensions. If crude sustains a bid above $110 a barrel, the risk of a global recession rises sharply," Peter Corey, chief market strategist at Pave Finance, said.
"Energy is a core input across supply chains, and higher crude prices quickly feed through to transport, manufacturing and consumer costs. Energy traders use a rule of thumb that every $10 dollar increase in crude causes a 0.3% contraction in consumption, so sustained prices above this level would start to meaningfully slow economic activity," Corey said.
By Faig Mahmudov
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