Wednesday, September 28, 2022
Home TECH Oil falls almost 4% due to the increase in the risks of...

Oil falls almost 4% due to the increase in the risks of a global recession

  • Oil prices fell on Friday and were on track to lose ground for the week.
  • WTI crude oil fell to a nine-month low and traded just above $80 a barrel.
  • Fears about a global recession rose after this week’s round of rate hikes by central banks.

Oil prices fell to a nine-month low on Friday as recession fears spread across global risk assets and the US dollar continued to rise this year to hit a new two-decade high against major currencies.

West Texas Intermediate crude fell as much as 3.8% to $80.35 a barrel, the lowest price since January. Subsequently, the decrease was reduced to 3.4%. Brent crude, the international benchmark, fell 3.2% to $87.41, its lowest price since January.

WTI was headed for a weekly loss of more than 5% and Brent was headed for a drop of more than 4% on the week.

“The threat of a global recession continues to weigh on oil prices, with widespread monetary tightening in recent days fueling fears of a significant hit to growth,” Craig Erlam, senior market analyst at Oanda, said in a statement. note. “Central banks now seem to accept that a recession is the price to pay for reining in inflation, which could weigh on demand next year.”

The Federal Reserve on Wednesday and the Bank of England and the central banks of Norway and Switzerland on Thursday raised interest rates to tackle elevated inflation as energy and food prices rose this year. The Federal Open Market Committee, aiming to slow activity in the world’s largest economy, is expected to lengthen its rate hike cycle until 2023 and expects to hit a maximum interest rate of 4.6%.

Recession concerns also hit European and Asian stock markets on Friday and US stock futures were in the red.

Oil prices were also lower than the US dollar and continued to rise. The US dollar index rose 0.8% on Friday, topping 112 to hit a new 20-year high. Dollar-denominated oil prices may be affected by gains in the value of the dollar, as it makes buying the commodity more expensive for foreign currency holders.

The index, which tracks the performance of the dollar against the euro, Japanese yen, sterling, Canadian dollar, Swedish krona and Swiss franc, was on track to rise more than 2% this week. The gains were buoyed by this week’s Fed rate hike of 75 basis points, the third meeting in a row to mark a huge increase in the fed funds rate. The rise in Treasury yields after the latest Fed rate hike has boosted demand for dollars.

Meanwhile, European Union officials are rushing to reach a deal to cap Russian oil prices after President Vladimir Putin stepped up Moscow’s aggression against Ukraine, according to a report. Bloomberg report Friday. The EU embargo on Russian crude transported by sea will start on December 5.

RELATED ARTICLES

On Portugal’s ‘Bitcoin Beach,’ Crypto Optimism Still Reigns

LAGOS, Portugal — Bitcoin Bam Bam Beach bar, on an uncrowded beach in southwestern Portugal, is the meeting place.To get there, you drive past...

This chatbot aims to steer people away from child abuse material.

Using the chatbot is more direct and perhaps more engaging, says Donald Findlater, director of the Stop It Now Helpline run by the Lucy...

‘Quordle’ Today: See Every ‘Quordle’ Answer & Suggestion For September 28

Wednesday is the best day to solve Quordles. You're in the middle of the work week and you deserve a little reward, but...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

How to Trade Pokemon in Pokemon GO

One of the most interesting systems in Pokémon GO is trading. By trading, you can not only get new Pokémon, but also give...

Crisis Core: Final Fantasy 7 and Harvestella Lead a Rush of Square Enix Fall Games

Reeling from pandemic production issues — and, perhaps, a gradual shift to more sustainable labor practices — the video game industry is...

The Handmaid’s Tale Season 5 Release Schedule: When Does Episode 5 Stream on Hulu?

Season 5 of The Handmaid's Tale is reaching its midway point as tensions reach boiling point between June Osborne (Elisabeth Moss) and Serena Waterford...

Currys Black Friday sale 2022: dates and offers to look forward to this November

November may seem a bit far away, but this year's Currys Black Friday deals will be here sooner than you think, especially since an...