SULAIMANI (ESTA) — Oil prices dropped more than 1% on Thursday in a volatile week as economic concerns and recession fears dogged global financial markets.
Brent crude futures slipped $1.98 to $105.3 a barrel by 0825 GMT. WTI crude futures fell $2.23 to $103.5 a barrel.
Oil prices are under pressure this week, along with global financial markets, on jitters over rising interest rates, the strongest U.S. dollar in two decades, concerns over inflation and possible recession, according to Reuters. Prolonged COVID-19 lockdowns in world’s top crude importer China have also impacted the market.
“Those recession concerns are drumming louder and taking oil lower this morning,” Reuters quoted Howie Lee, an economist at Singapore’s Oversea Chinese Banking Corp as saying, pointing to strong U.S. consumer price index (CPI) data on Wednesday.
U.S. headline CPI for the 12 months to April jumped 8.3%, reaffirming concerns that interest rates will need to rise quickly to tame it.
However, supply concerns stemming from Russia’s invasion of Ukraine have bolstered the market, with prices rising over 35% so far this year. A pending EU ban on oil from Russia, a key EU supplier of crude and fuels, that could further tighten global supplies is underpinning prices.
The EU is still haggling over the details of the Russian embargo. The vote needs unanimous support, but it has been delayed as Hungary opposes the ban because it would be too disruptive to its economy.
(Esta Media Network/Reuters)
