Oil prices fell on Friday amid recession fears and a stronger US dollar, though losses were capped by supply concerns after Moscow’s new mobilisation campaign in its war with Ukraine and an apparent deadlock in talks on reviving the Iran nuclear deal.

Brent crude futures fell 41 cents, or 0.5 per cent, to $90.05 per barrel at 0325 GMT, while US West Texas Intermediate (WTI) crude futures were down 30 cents, or 0.4pc, to $83.19.

Front-month Brent and WTI contracts were down 1.5pc and 2.3pc, respectively, for the week so far.

“In the wake of accelerating rate hikes by the major central banks, the risk of a global economic recession overshadows supply issues in the oil markets, despite the recent escalation in the Russia-Ukraine war,” said CMC Markets analyst Tina Teng.

“However, a sharp fall in the US SPR and drawdown in inventories may still keep oil prices supported at some point as there is still an inevitable undersupply issues in the physical markets, while Iran’s nuclear deal is in stalemate,” she said, referring to crude oil in the US Strategic Petroleum Reserve which dropped last week to its lowest since 1984.

Following the US Federal Reserve’s hefty 75 basis point increase on Wednesday for a third time, central banks around the world also followed suit in hiking interest rates, raising the risk of economic slowdowns.

“Crude prices remain volatile as energy traders grapple with a deteriorating demand outlook that is still vulnerable to shortages,” said Edward Moya, senior market analyst at Oanda, in a note.

“Supply risks and tight market conditions should give oil some support above the $80 level, but a quicker tumble to a global recession will keep prices heavy.”

A senior US State Department official said that efforts to revive the 2015 Iran nuclear deal have stalled due to Tehran’s insistence on the closure of the United Nations nuclear watchdog’s investigations, easing expectations of a resurgence of Iranian crude oil.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Smog hazard
Updated 05 Nov, 2024

Smog hazard

The catastrophe unfolding in Lahore is a product of authorities’ repeated failure to recognise environmental impact of rapid urbanisation.
Monetary policy
05 Nov, 2024

Monetary policy

IN an aggressive move, the State Bank on Monday reduced its key policy rate by a hefty 250bps to 15pc. This is the...
Cultural power
05 Nov, 2024

Cultural power

AS vital modes of communication, art and culture have the power to overcome social and international barriers....
Disregarding CCI
Updated 04 Nov, 2024

Disregarding CCI

The failure to regularly convene CCI meetings means that the process of democratic decision-making is falling apart.
Defeating TB
04 Nov, 2024

Defeating TB

CONSIDERING the fact that Pakistan has the fifth highest burden of tuberculosis in the world as per the World Health...
Ceasefire charade
Updated 04 Nov, 2024

Ceasefire charade

The US talks of peace, while simultaneously arming and funding their Israeli allies, are doomed to fail, and are little more than a charade.