Brent crude futures fell 41 cents.
On Wednesday, oil prices went up by more than $3, but on Thursday, they went down a little bit. This was because a strong dollar made it harder for buyers with other currencies to buy oil, and worries about the weakening economy clouded market sentiment.
By 3:37 GMT, Brent crude futures had dropped 41 cents, or 0.5%, to $88.91 per barrel, while U.S. crude futures had fallen 35 cents, or 0.4%, to $81.80 per barrel.
Related: Supply and demand may balance, keeping oil prices steady.
Both benchmarks had gone down to their lowest levels in nine months this week, but they had gone back up in the last two sessions. This was because a temporary drop in the dollar index and a bigger-than-expected drop in U.S. fuel inventories gave people hope that consumer demand would pick up.
But the dollar index started going up again on Thursday. This made investors less willing to take risks and fueled fears of a global recession.
The Bank of England said it would buy as many long-term government bonds, called gilts, as it takes between Wednesday and October 14 to stabilise its currency after the British government’s budget plans last week caused the sterling to drop.
Goldman Sachs lowered its prediction for the price of oil in 2023 on Tuesday, citing weaker demand and a stronger U.S. dollar. However, the firm said that global supply disappointments made its long-term bullish outlook even stronger.
In China, which imports more crude oil than any other country, the number of people travelling during the week-long national holiday is expected to be the lowest it has been in years. This is because Beijing’s zero-COVID rules are making people stay home, and economic problems are making people spend less.
Citi economists have cut their prediction for China’s GDP growth from 5% to 4.6% for the fourth quarter of 2022.
In a note released on Wednesday, Citi analysts said, “Strong zero-COVID measures and a weak real estate market continue to cloud growth prospects.”
On the other side of the world, the European Union proposed a new set of sanctions against Russia because it invaded Ukraine. These sanctions include tighter trade restrictions, more blacklistings of individuals, and a cap on the price of oil for third countries.
Related: Oil prices keep falling, and people are worried about demand.
But for them to work, the 27 countries that make up the bloc will have to get past their own differences.
