Oil prices tumbled on Thursday, after gaining more than $3 in the previous session, as concerns over a stronger dollar that restrained oil demand and a weakening global economic outlook overshadowed market sentiment.
Brent crude futures fell 91 cents, or 1%, to $88.41 a barrel as of 0629 GMT, while WTI crude futures fell 80 cents, or 1%, to $81.33 a barrel.
Both indicators had rebounded in the previous two sessions after hitting nine-month lows this week after a temporary drop in the dollar index and a larger-than-expected drop in the US fuel inventory.
However, the dollar index entered an upward trend again on Thursday, reducing investor risk appetite and fueling fears of a global recession.
The Bank of England is struggling to stabilize the currency after the British government’s budget plans announced last week caused the pound to plummet.
Goldman Sachs cut its oil price forecast for 2023 on Tuesday, citing weak demand and prospects for a stronger US dollar, but said global supply disappointments reinforced its long-term bullish outlook.
EU pledges to protect energy network after ‘sabotage’ of Russian gas pipeline. In addition, the EU said that the gas price cap would bring risks to the countries.
In China, the world’s largest importer of crude oil, travel will hit a multi-year low during the next week-long national holiday as Beijing’s permanent zero-COVID rules encourage people to stay at home and economic woes reduce spending.
Citi economists lowered their Chinese GDP forecast for the fourth quarter of 2022 to 4.6% year-on-year from 5%.
Citi analysts wrote in a note Wednesday that Tight zero-COVID measures and the weak real estate sector continue to cloud growth prospects.
The European Union has proposed a new round of sanctions against Russia over its invasion of Ukraine, including tighter trade restrictions, more individual blacklists, and an oil price ceiling for third countries.
But the bloc’s 27 member states will first have to overcome their own differences to implement them.
