Oil prices drop as central banks spark recession fears
Dec 17, 2022
New York [US], December 17: Oil prices fell on Friday as hawkish talk from major central banks stoked recession fears.
The West Texas Intermediate (WTI) for January delivery lost 1.82 U.S. dollars, or 2.4 percent, to settle at 74.29 dollars a barrel on the New York Mercantile Exchange. Brent crude for February delivery dropped 2.17 dollars, or nearly 2.7 percent, to settle at 79.04 dollars a barrel on the London ICE Futures Exchange.
The pullback came as a raft of central banks including the Federal Reserve, the European Central Bank, and Bank of England delivered sizable rate hikes this week and stressed a tough stance against inflation.
"The market started to price in higher interest rates and an increased risk of recession thereby raising concerns about future oil demand," Phil Flynn, senior energy analyst at The PRICE Futures Group, said Friday in a note.
"We think fears of global oil demand destruction are being overplayed and we expect a very tight market in the coming months," he added.
For the week, oil prices posted gains, with the WTI and Brent up 4.6 percent and 3.9 percent, respectively, supported by expectations of higher demand in China.
Source: Xinhua
