For the past two years, crypto investors have been focusing on topics that we have not been accustomed to paying attention to. The expectation of ETF approval, the upcoming halving, and many other reasons are maturing the conditions for a rapid rise. However, due to cautious investors, we are witnessing a performance worse than the days when the 2020 PayPal news came.
Fuel Price Hike on the Way
What is the connection between cryptocurrencies and fuel prices? It is an indirect detail that is extremely important and definitely concerns crypto. The decrease in US inflation, supported by the decrease in fuel prices, has significantly reduced. However, the recent statements from Russia and Saudi Arabia suggest that fuel prices may continue to rise globally until the end of the year.
Voluntary production cuts by Saudi Arabia and Russia have been extended. The production cut of 1.3 million barrels will continue for another three months until December. With this news, the price of oil exceeded $90. Due to the increasing prices on a global scale in Turkey and other regions of the world, the numbers at the pump will be updated soon. This situation may lead to further inflation and prompt the Fed to tighten its monetary policy and delay rate cuts.
Why Will Cryptocurrencies Fall?
If inflation continues to rise or if the decrease in inflation is halted due to the increase in fuel prices, the Fed may need to take action. We can say that today’s negative BTC price is somewhat related to this. Moreover, we will see the effects of the increasing oil price in the September inflation figures next month. Remember a few months ago we mentioned that the oil price below $68 would support the decrease in inflation. Now, with the price hovering around $90, it will erase the decrease in many items.
In a statement on Tuesday, the SPA said that Riyadh’s decision to extend the voluntary production cut of 1 million barrels would be reviewed monthly to assess whether the cut should be deepened or if production should be increased. Deputy Prime Minister Alexander Novak said on Tuesday that Russia, a member of OPEC+, has also extended its voluntary cuts until the end of the year to maintain “stability and balance” in the oil markets. Russia is also reducing oil production by 500,000 barrels per day until the end of 2024.
