# Oil’s Current Plunge: Goodbye Inflation Trade, Hello Recession

> Brent futures fell more than $10 a barrel, their third-largest daily drop on record, and WTI dropped below $100 for the first time since May. Traders unwound the inflation-hedge trade as recession fears and aggressive interest rate hikes took hold.

- Date: 2022-07-06 · published 2022-07-06T12:00:00.000Z
- Category: macro · region Global · magnitude medium
- Page: https://feedsoft.ai/events/12614-oil-s-current-plunge-goodbye-inflation-trade-hello-recession
- Commodities: [Crude Oil (WTI)](https://feedsoft.ai/c/WTI.md), [Crude Oil (Brent)](https://feedsoft.ai/c/BRENT.md)

## Why it matters

The unwinding of oil as an inflation hedge reduces investment flows into commodities, which pressures feed-related energy and commodity prices lower.

## Read by commodity

- WTI: bearish ▼
- BRENT: bearish ▼

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| WTI | 2022-07-05 | 1 | -5.7% | -3.3 | Explains the plunge as unwinding of the inflation-hedge trade as recession fears and rate hikes took hold; it is dated a day later but describes the same move. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| WTI | 2022-07-05 | [Oil could plummet to the $60s if a recession hits, Citi speculates](https://feedsoft.ai/events/12618-oil-could-plummet-to-the-60s-if-a-recession-hits-citi-speculates.md) | -3.9% | -12.8% |
| WTI | 2018-12-24 | [Plunging oil prices show the market is worried about 2019 recession](https://feedsoft.ai/events/8701-plunging-oil-prices-show-the-market-is-worried-about-2019-recession.md) | -0.5% | +15.7% |
| WTI | 2023-12-12 | [U.S. crude oil falls more than 3% on inflation worries](https://feedsoft.ai/events/32888-u-s-crude-oil-falls-more-than-3-on-inflation-worries.md) | +1.7% | +0.6% |
| WTI | 2022-07-01 | [Oil prices fall due to recession worries](https://feedsoft.ai/events/40409-oil-prices-fall-due-to-recession-worries.md) | -0.9% | -6.2% |
| WTI | 2020-04-27 | [U.S. oil plunges 25%, Brent falls below $20 a barrel \| Reuters](https://feedsoft.ai/events/53810-u-s-oil-plunges-25-brent-falls-below-20-a-barrel-reuters.md) | +21.1% | +105.0% |
| BRENT | 2022-07-05 | [Oil could plummet to the $60s if a recession hits, Citi speculates](https://feedsoft.ai/events/12618-oil-could-plummet-to-the-60s-if-a-recession-hits-citi-speculates.md) | -4.9% | -11.7% |
| BRENT | 2018-12-24 | [Plunging oil prices show the market is worried about 2019 recession](https://feedsoft.ai/events/8701-plunging-oil-prices-show-the-market-is-worried-about-2019-recession.md) | -1.3% | +15.8% |
| BRENT | 2023-12-12 | [U.S. crude oil falls more than 3% on inflation worries](https://feedsoft.ai/events/32888-u-s-crude-oil-falls-more-than-3-on-inflation-worries.md) | +3.3% | +2.3% |

## Sources

- bloomberglinea.com: https://www.bloomberglinea.com/english/oils-current-plunge-goodbye-inflation-trade-hello-recession/

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.