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Futures Movers: Oil slumps after hot inflation reading, while IEA warns of global recession

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Oil futures fell Thursday after a hotter-than-expected consumers price index reading was seen forcing the Federal Reserve to keep aggressively tightening monetary policy, while the International Energy Agency warned that OPEC+ supply cuts could tip global economy into recession.

Price action

West Texas Intermediate crude for November delivery



fell 45 cents, or 0.5%, to $86.82 a barrel on the New York Mercantile Exchange.

December Brent crude

the global benchmark, declined by 20 cents, or 0.2%, to $92.25 a barrel on ICE Futures Europe.

Back on Nymex, November gasoline

added 0.3% to $2.6381 a gallon, while November heating oil

was up 1% at $3.9738 a gallon.

November natural gas

edged up by 0.2% to $6.447 per million British thermal units.

Market drivers

Crude futures lost ground after data showed the year-over-year rise in the consumer price index slowed to 8.2% last month from 8.3% in August, while the annualized increase in core CPI, which strips out volatile food and energy prices, rose to 6.6% from 6.3%. Both numbers came in higher than economists polled by The Wall Street Journal had expected.

The data triggered a selloff across assets perceived as risky with U.S. stock-index futures pointing to a sharply lower open for Wall Street.

Meanwhile, the decision last week by the Organization of the Petroleum Exporting Countries and its allies — a group known as OPEC+ — to cut output by 2 million barrels a day threatens to deepen a global energy crisis by sending oil prices higher at a time of already elevated inflation and weak economic growth, the International Energy Agency said in a monthly report.

While the reduction is expected to be around half that size, since several OPEC+ members were already producing below their targets, it remains significant amid tight global supplies, analysts have warned.

The Energy Information Administration will release its weekly U.S. petroleum inventory report at 11 a.m. Eastern time, a day later than usual because Monday was a federal holiday.

On average, analysts polled by S&P Global Commodity Insights forecast a supply climb of 2.2 million barrels for crude, and inventory declines of 2.1 million barrels for gasoline and 2.3 million for distillates.

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