After rising by more than $3 the previous day, oil prices somewhat declined on Thursday as fears about the deteriorating economic outlook and a strong dollar limited demand from customers using other currencies.
By 0337 GMT, US crude prices were down 35 cents, or 0.4%, to $81.80 per barrel, while Brent crude futures were down 41 cents, or 0.5%, to $88.91 per barrel.
Both benchmarks had recovered in the previous two days after this week’s nine-month lows when a brief decline in the dollar index and a larger-than-anticipated decrease in US fuel inventories stoked expectations of a resurgence in consumer demand.
On Thursday, though, the dollar index started to move higher once more, which reduced investor risk taking and fueled worries of a worldwide recession.
According to the Bank of England, it will purchase as many long-dated government bonds, or gilts, as are required between Wednesday and October.
14 to stabilise its currency after the sterling fell as a result of the British government’s financial measures unveiled last week.
In light of anticipated weaker demand and a higher US dollar, Goldman Sachs lowered its oil price projection for 2023 on Tuesday but added that global supply disappointments strengthened its long-term bullish picture.
Travel for the seven-day national holiday is expected to be at its lowest level in years in China, the world’s largest importer of crude oil, as Beijing’s steadfast zero-COVID regulations encourage people to stay at home and economic difficulties restrain spending.
For the fourth quarter of 2022, Citi economists have revised down their prediction for China’s GDP from 5% year-over-year growth to 4.6%.
In a note published on Wednesday, Citi analysts stated that “strict zero-COVID regulations and a poor property sector continue to cloud growth forecasts.”
On the other side of the globe, the European Union recommended fresh penalties against Russia for its invasion of Ukraine, including more extensive individual blacklistings, harsher trade restrictions, and a cap on oil prices for third-party nations.
But in order to put them into practise, the 27 nations that make up the bloc will have to get over their own conflicts.
