Concern over a slowdown in economic growth resulting in lower global oil demand continued to weigh on oil prices during the week ending June 23.
International benchmark Brent crude traded at $73.28 per barrel at 2.29 p.m. (1129 GMT) on Friday, decreasing 4.34% relative to the closing price of $76.61 a barrel on Friday last week.
The American benchmark West Texas Intermediate (WTI) traded at $68.56 per barrel at the same time, posting a 4.48% fall from last Friday’s session that closed at $71.78 a barrel.
Recessionary fears grow in Western economies as central banks raise interest rates and signal further hikes.
The Bank of England raised the policy rate by 50 basis points to 5%, while the Swiss National Bank increased its policy rate by 25 basis points to 1.75%. The Norwegian Central Bank raised the policy rate by 50 basis points to 3.75%.
Demand concerns surfaced in the world’s biggest oil consumer after US Federal Reserve (Fed) Chair Jerome Powell highlighted the possibility of further interest rate hikes in the battle against inflation. Powell said the Federal Open Market Committee agreed that 2 more rate hikes could be necessary.
The central bank’s latest projections indicate that two more rate hikes of 25 basis points each are likely for the remainder of the year.
Weak economic data in China, the world’s largest oil importer, pushed oil prices lower. According to China’s National Bureau of Statistics (NBS), industrial output fell short of expectations with a growth rate of 3.5% in May from a year earlier, slowing from the 5.6% expansion in April.
Also, the rise of the dollar against other currencies put downward pressure on oil prices. The US dollar index, which measures the value of the US dollar against other currencies increased to 102.602, a 0.33% rise from last Friday.
The strong dollar leads to lower demand by making oil more expensive for other currency users.
