Oil plunges to lowest level since Jan.
The price of U.S. benchmark West Texas Intermediate slid roughly 5% to trade at $79 per barrel, reaching its lowest point since January amid mounting recession fears. Meanwhile, the price of international benchmark Brent crude fell below $87 per barrel, also on track for its lowest close since January.
Both WTI and Brent crude were in technically oversold territory, posting a fourth straight week of declines on Friday and marking the worst losing streak since last December.
Widespread recession fears have been weighing on energy prices but also slammed the stock market recently, with the S&P 500 and Dow Jones Industrial Average falling back into bear market territory on Friday. Both major indexes also set a new low point for the year amid the broad selloff.
Contributing to oil’s decline was also continued strength in the U.S. Dollar, which is considered a safe-haven asset. The ICE U.S. Dollar Index, which tracks the Dollar against a basket of other currencies, rose nearly 1% and reached its highest level since 2002.
With the Federal Reserve raising interest rates by 75 basis points for a third consecutive policy meeting in a row on Wednesday, central banks around the world have been doing the same by announcing rate hikes. Global economic growth concerns have “hit panic mode given a chorus of central bank commitments to fight inflation,” says Edward Moya, senior market analyst at Oanda.
