After three days of gains, oil prices dropped considerably due to concerns that aggressive interest rate increases; by the United States will slow down the global economy and reduce demand for fuel.
In the early hours of London’s trading session, Brent oil futures for October settlement had dropped by 1.2%, to $95.41 per barrel; as concerns over sluggish demand in China due to a power shortage in some places added to the downward pressure on prices.
The price of a barrel of U.S. West Texas Intermediate (WTI) crude for September delivery, which was set to expire on Monday, increased by more than a percent to $89.65. At $89.29 per barrel, the more active October contract was also moderating by 1%.
Brent and WTI both increased for a third straight day, although they both decreased by roughly 1.5% for the week due; to stronger dollar and supply concerns.
Investors were concerned that a potential sharp rate increase by the Fed might result in a slowdown in the economy and reduce fuel demand.