Oil was sharply lower despite inflationary pressures coming from the recent money printing, while the greenback was also weaker on Tuesday. The correlation between the US dollar and oil seems to be over for now.
Earlier in the day, the International Monetary Fund predicted the “Great Lockdown” recession would be the steepest in almost a century and warned the world economy’s contraction and recovery would be worse than anticipated if the coronavirus lingers or returns.
In its first World Economic Outlook report since the spread of the coronavirus and subsequent freezing of major economies, the IMF estimated on Tuesday that global gross domestic product will shrink 3% this year.
That compares to a January projection of 3.3% expansion and would likely mark the deepest dive since the Great Depression. It would also dwarf the 0.1% contraction of 2009 amid the financial crisis.
If the WTI benchmark dives below the 20 USD barrier, we could see a quick decline toward 18 USD, with the next target probably at around 15 USD.