Brent crude futures dropped $2.94.
NEW YORK- On Friday, oil prices fell by more than 3% because of worries about a global recession and weak oil demand, especially in China. This was more than made up for by a big cut to the OPEC+ supply target, which helped support prices.
Brent crude futures fell $2.94, or 3.1%, to end the day at $91.63 per barrel, while U.S. West Texas Intermediate (WTI) crude futures fell $3.50, or 3.9%, to $85.61.
Brent and WTI contracts were both up and down for most of Friday, but they both went down for the week by 6.4% and 7.6%, respectively.
Related: Brent crude oil is approaching $140 per barrel, edging closer to an all-time high.
The U.S. had its biggest annual increase in core inflation in 40 years, which added to the idea that interest rates would stay high for longer because of the risk of a global recession. On Nov. 1 and 2, the U.S. will decide on the next interest rate.
A survey showed that the mood of U.S. consumers kept getting better in October, but their expectations about inflation got a little worse.
The rise in consumer confidence “is seen as a bad thing because it means the Fed needs to break the consumers’ spirits and slow the economy down even more,” said Phil Flynn, an analyst at Price Futures Group in Chicago. This has caused the dollar to rise and the oil market to fall.
The value of the U.S. dollar went up by about 0.8%. When the dollar gets stronger, the price of oil goes up, which makes fewer people want to buy it.
Baker Hughes Co., an energy services company, said that energy companies in the U.S. added eight oil rigs this week, bringing the total to 610. This is the highest number of oil rigs since March 2020.go to site
After a week off, China, which buys the most crude oil in the world, has been fighting COVID-19 flare-ups. The number of infections in the country is small compared to the rest of the world, but it has a zero-COVID policy that is putting a lot of pressure on economic activity and, by extension, oil demand.
The International Energy Agency (IEA) lowered its predictions for oil demand this year and next, citing the possibility of a global recession.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, made a decision last week to cut oil production goals by 2 million barrels per day (bpd). The market is still trying to figure out what this means.
Related: A three-dollar increase in the price of crude oil on the global market.
The group’s low production means that this will likely mean a cut of 1 million bpd, says the IEA.
The decision has caused disagreements between Saudi Arabia and the United States.
The U.S. Commodity Futures Trading Commission (CFTC) said that money managers increased their net long positions in U.S. crude futures and options by 20,215 contracts to 194,780 in the week ending October 11.
