Oil SlumpsAs something of a topsy-turvy week comes to a close in financial markets, traders are of course looking ahead to next week. The December FOMC meeting is drawing evermore attention and with the BOE and ECB also on deck, it promises to be a big week for markets. Ahead of those events, however, I’ve been chatting with traders about the action we’ve seen this week and it seems the main move capturing people’s attention is the more than 13% drop we’ve seen in crude oil prices this week. So, let’s take a look at what caused the move and, as ever, if you caught it? Well done! If you missed it? There’s always next week.What Caused the Move?Recession FearsThe main issue driving oil prices lower this week is a resharpened focus on global recession risks. With fears that the Fed will extend the duration of its tightening program in the face of still-too-high inflation, many fear that US growth will suffer over next year, as will growth around the globe. Indeed, with further tightening expected from the BOE and ECB, tighter financial conditions and rampant inflation are eating away at 2023 growth forecasts. This is leading to a sharply reduced demand outlook for oil into next year, a sentiment we’ve heard expressed from OPEC and the IEA recently.Demand Falling Additionally, oil prices have come under pressure this week from the activation of European sanctions and a G7 price cap on Russian oil. The market reaction to these measures starting might well have been expected to send oil prices soaring higher. However, the fact that prices have instead moved lower is a reflection of just how severe these global recession fears are within the context of the oil demand outlook. In the US, petrol demand is at its lowest level in two decades, seasonally, having only been this low before during 2020 at the start of the pandemic.China on Watch Looking ahead, the key factors for oil will no doubt be the path of US rates projected from next week’s FOMC meeting alongside developments within China over coming weeks and month. If the Chinese government abandons its zero covid policy, this will no doubt lead to a sharp spike higher in oil prices.Technical ViewsCrude OilThe breakdown below the rising trend line and below the 76.49 level is a heavily bearish technical development for oil prices. While below here the focus is on a continued push lower towards the 66.97 level next in line with bearish momentum studies readings.