Oil prices drop with looming US recession fears

Oil prices fell on Friday amid fears of an economic slowdown, sparking recession fears in the US.

International benchmark Brent crude traded at $84.34 per barrel at 09.25 a.m. local time (0625 GMT), down 0.19% from the closing price of $84.50 a barrel in the previous trading session.

At the same time, American benchmark West Texas Intermediate (WTI) traded at $77.80 per barrel, a 0.33% drop after the previous session closed at $78.06 a barrel.

Oil prices came under pressure as the US faces high inflation, triggering recession fears.

The US Fed President, Thomas Barkin, said on Thursday that ‘inflation, while likely past its peak, is still elevated,’ at 6.5%.

Market participants are anticipating the release of January US inflation data next week. The data will provide insight into the severity of the country’s potential recession.

If the country enters a recession, economic activity will slow down, suppressing oil demand in the world’s largest oil consumer.

Meanwhile, the economic recovery in China, the world’s biggest oil importer, is likely to help boost demand and push oil prices higher. China ditched its ‘zero-COVID’ policy last month, allowing full international travel.

• American benchmark West Texas Intermediate