(RTTNews) - The price of crude oil showed a substantial move to the downside during trading on Tuesday, giving back ground following the spike seen in the previous session.
After soaring $3.95 to $97.01 a barrel on Monday, the price of crude oil for October delivery plunged $5.37 to $91.64 a barrel.
While signs of OPEC+ production cuts contributed to the surge in the previous session, the pullback came amid indications Iraqi oil production will not be impacted by recent turmoil in the country.
"Oil prices declined as the global growth outlook continues to deteriorate and as geopolitical risks have yet to lead to any disruptions for crude exports," said Edward Moya, senior market analysts and OANDA. "To start the trading week, it seemed energy traders were anticipating some disruptions from either Iraq or Libya and so far that doesn't seem to be the case. "
"The oil market is still tight, so this downward move should not last much longer," he added. "If WTI crude easily breaks below the $90 level, bearish momentum could make this interesting and make a run for the August lows."
The sharp pullback by the price of crude oil also came amid concerns higher interest rates will lead to a global economic slowdown, reducing energy demand.
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