Oil prices have fallen sharply ahead of US President Joe Biden’s expected move to suspend taxes on fuel. A barrel of North Sea Brent and US light oil WTI fell 3.2 and 3.8 percent to $ 111.03 and $ 105.34 respectively. Biden wants to suspend the gasoline tax for three months because of record high prices at the pumps. Biden is pushing to lower fuel costs for motorists. Rising crude oil and gasoline prices are seen as a key reason inflation has soared to a 40-year high. A meeting of seven oil companies with the US President is scheduled for this week. In view of the record profits of the oil companies, the aim is to discuss how to increase production capacity and reduce fuel prices by around five dollars a gallon. In mid-2020 it was less than $2 a gallon, and in early 2022 it was about $3.40 a gallon. “However, this should have a price-supporting effect, since the demand for petrol should be stimulated by it,” interjected Commerzbank analyst Carsten Fritsch. Recession fears were cited as the reason on the market.
Gloomy economic prospects also triggered a sell-off in industrial metals. At times, the price of copper fell by almost four percent to a one-and-a-half-year low of $8,658 per ton. The tin price fell by 6.7 percent, nickel lost 6.4 percent per ton.
By contrast, government bonds were in demand among risk-averse investors. Meanwhile, the 10-year Bund yield fell to 1.597 percent after hitting its highest level since January 2014 on Thursday. Gold was only able to benefit slightly from fears of a recession. The price of an ounce of the precious metal rose 0.3 percent to $ 1836.