The world price of oil was actively declining on Tuesday after a sharp rise the day before, when WTI futures closed the session above $100 per barrel. Commodity market participants are focused on the assessment of the prospects for demand and the study of forecasts for supplies.

At one point, the price of September futures for Brent crude oil plunged by 1.67% to $104.5 per barrel, and September futures for WTI crude oil – by 2% to $100.55 per barrel.

At the same time, following the results of the previous trading session, Brent oil contracts jumped in price by 5.1% to $106.27 per barrel, WTI contracts also increased by 5.1% to $102.60 per barrel.

The sharp upward surge in the value of oil on Monday was provoked by two main factors: the visit of US President Joe Biden to Saudi Arabia and a noticeable decline in the exchange rate of the US dollar against major world currencies.

According to media reports, during a meeting with the leadership of Saudi Arabia, Biden discussed the issue of oil supplies to the world market. In his interview with the press following the meeting, the US president called the talks "positive", but there were no clear assurances from the Saudi leadership about an imminent increase in production and exports.

As for the change in the vector of the dollar's movement, on Monday, the US currency, which has been increasing spectacularly since the beginning of this month on expectations of tightening monetary policy by the US Federal Reserve, sharply plunged against major world currencies. Thus, the ICE index, reflecting the dynamics of the dollar price against six key currencies of the world, lost 0.9% during trading on Monday. Traditionally, a cheaper dollar has provided additional support to world oil prices.

At the same time, analysts call investors' concerns about demand in conditions of recession risks in the economy as the main catalyst for the decline in oil prices on Tuesday. At the same time, oil market participants continue to closely monitor the situation around supplies amid the OPEC+ alliance deal.

The key reasons for concerns about the prospects of the economy remain the record level of inflation in the United States and the eurozone, as well as decisive measures to combat permanent price increases by world central banks. Major central banks are ready to sharply raise key interest rates, which could trigger a global recession in the economy, which will negatively affect expectations for oil demand.

Recall, according to the statistics published last week from the United States, in June the inflation rate in the country rose to 9.1% in annual terms from May's 8.6%. The US Federal Reserve is expected to increase the base rate this month, and the European Central Bank's decision on the key rate will be announced on Thursday.

By the way, commenting on the sharp decline in the global cost of oil following the spectacular growth from the day before, experts urged traders not to panic, because despite the departure of oil from its price peaks, there are no prerequisites on the market for its significant rollback from current levels.