ISLAMABAD: The international crude oil price of the OPEC basket today crashed below $85 per barrel. For the past many days, OPEC oil was staying around $95 a barrel, but today its value dropped to $84.13 per barrel on Thursday morning.
The price of Brent crude, nevertheless, slightly fell, to $93.73 per barrel on Thursday morning.
Global trade is slowing, indicating economic slowdown is underway and a recession in major markets could soon materialize, threatening oil demand.
According to the Goods Trade Barometer from the World Trade Organization (WTO) latest data, at the end of August 2022 the global trade growth is stagnant. The global goods trade continued to grow in the second quarter of 2022 but the pace of growth was slower than in Q1 and it is likely to remain weak in the second half of the year,” the WTO said.
Earlier, the WTO predicted 3% growth in the volume of world merchandise trade in 2022, however, uncertainty surrounding the forecast has increased due to the ongoing conflict in Ukraine, rising inflationary pressures, and expected monetary policy tightening in advanced economies.
Trade volumes are set to weaken through the rest of the year, and stagnating growth has led to a major drop in global freight rates.
With inflation curbing consumer demand, the party is over for spot freight rates, Jonathan Roach, a container shipping analyst at Braemar, told The Wall Street Journal this week. Container shipping rates have plunged by 60% year to date, per Freightos Baltic Index cited by the Journal.
