Oil Slips on Fears Recession May Hit Demand

Oil Slips on Fears Recession May Hit Demand

Oil prices fell on Thursday in a volatile week as recession fears dogged global financial markets, outweighing supply concerns and geopolitical tensions in Europe.

Brent crude was down $1.92, or 1.8%, to $105.59 a barrel at 1202 GMT. WTI crude fell $1.79, or 1.7%, to $103.92 a barrel.

Oil prices are under pressure this week, along with global financial markets, amid jitters over rising interest rates, the strongest US dollar in two decades, concerns over inflation and possible recession.

Prolonged COVID-19 lockdowns in the world's top crude importer, China, have also impacted the market.

"Those recession concerns are drumming louder and taking oil lower this morning," said Howie Lee, an economist at Singapore's Oversea Chinese Banking Corp, pointing to strong US consumer price index (CPI) data on Wednesday.

US headline CPI for the 12 months to April jumped 8.3%, fueling concerns about bigger interest rate hikes, and their impact on economic growth.

"Soaring pump prices and slowing economic growth are expected to significantly curb the demand recovery through the remainder of the year and into 2023," the International Energy Agency (IEA) said on Thursday in its monthly report.

"Extended lockdowns across China ... are driving a significant slowdown in the world’s second largest oil consumer," Reuters quoted