Oil prices plunged over 5% to an eight-month low on Friday as the US dollar hit its strongest level in more than two decades and on fears rising interest rates will tip major economies into recession.
Brent futures fell $4.75, or 5.3%, to $85.71 a barrel by 1606 GMT, down about 6% for the week. US West Texas Intermediate (WTI) crude fell $5.19, or 6.2%, to $78.30 a barrel, down 8% for the week.
It was the fourth straight week of declines for both benchmarks, the first time this has happened since December. Both were technically oversold, with WTI on track for its lowest settlement since Jan 5 and Brent for its lowest since Jan 13.
US gasoline and diesel futures were also down more than 5%. The US Federal Reserve raised interest rates by a hefty 75 basis points on Wednesday. Central banks around the world followed suit with their own hikes, raising the risk of economic slowdown. “The threat of a global recession continues to weigh on oil prices, with widespread monetary tightening over the last couple of days fueling fears of a significant hit to growth,” said Craig Erlam, a senior market analyst at data and analytics firm Oanda.
Published in The Express Tribune, September 24th, 2022.
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