WTI continues to struggle at around $100.00 amid renewed recession fears

• Oil prices are continuously struggling to cross the psychological resistance of $100.00.
• Tight labor market in the US economy has just got an evil eye. Google halted the recruitment process.
• PBOC’s status quo in times when the economy is facing pandemic will impact the oil prices.

West Texas Intermediate (WTI), futures on NYMEX, is continuously struggling to surpass the magical figure of $100.00 from the entire week. The oil prices have remained sideways amid the unavailability of any potential trigger that could guide the asset to a directive move. The black gold has traded in a $96.28-100.70 range and is likely to continue its consolidation further.

The ghost of recession is back in sight as the US corporate has signaled no vacancy slogan due to lower demand. Considering the expectations of slippage in demand due to extreme policy tightening measures by the Federal Reserve (Fed) and other central banks, Google reported a two-week halt in recruitment, while Ford announced plans to cut around 8,000 jobs.

Price pressures are still far from control despite the heavy rate hikes by the central banks and the catalyst which was empowering them to tighten policy unhesitatingly was the tight labor market. Now, expectations of lower headcounts by Google in upcoming quarters may weigh pressure on central banks and the impact of higher inflation will keep lingering on the economy. This has accelerated the odds of a recession situation in the US economy.

Apart from that, unchanged interest rate policy by the People’s Bank of China (PBOC) in times when the economy is going through a pandemic, Chinese economic activities will face more heat. It is worth noting that China is a leading importer of oil and a halt in manufacturing activities in China will pose a significant impact on oil prices.