USOIL 6th JULY 2022USOIL fell below USD 100 as recession fears grew, fueling concerns that the economic slowdown would cut demand for petroleum products.
In the macro trend, oil tends to be bearish. By the end of this year if the economy is heading into a recession. In a recession scenario with rising unemployment, bankruptcy of households and firms, commodities will chase a downward cost curve as costs deflate and margins turn negative to encourage supply curbs.
However, the decline in oil prices will actually benefit manufacturing companies. They will take cheap prices for supplies, after 2 quarters of prices soaring.
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