The commodities market in 2022 has been nothing short of a rollercoaster ride, especially in the Oil and Energy market, where the volatility is similar to that seen in the cryptocurrency market which is very unusual. Ever since the pandemic of 2020, the oil market saw its fair share of volatility, with the global benchmark, the brent crude oil, trading as low as $21 a barrel in April 2020, at the peak of the pandemic, to trading as high as $139 when Russia invaded Ukraine.
However, it would seem as though the era of high oil prices will soon be a thing of the past as the global benchmark posted a weekly decline nearing 14%. This comes after conceding almost 7% in July and more than 4% in June. The decline seen last week is also the benchmark’s worst weekly loss since the week to April 17, 2020, when it tumbled 24%.
In the past, oil bulls used to beam at the U.S. jobs market with pride. Now, they aren’t so sure anymore if they should. There is a close nexus between oil prices and job numbers in the United States, with the simple logic being that more fuel is needed for more people to commute or get around. But it gets more complicated when those same job numbers and higher wages lead to higher inflation and consequently, higher interest rates.