Oil prices tumbled about 5% to a three-week low on Friday, led by a slump in US gasoline futures, as investors were worried that interest rate hikes from major central banks could slow the global economy and cut demand for energy.
Also pressuring prices, the US dollar this week rose to its highest since December 2002 against a basket of currencies. A stronger dollar makes oil more expensive for buyers using other currencies.
Brent futures fell $5.85, or 4.9%, to $113.96 a barrel as of 1502 GMT. US West Texas Intermediate (WTI) crude fell $6.66, or 5.7%, to $110.93. Both were on track for their lowest close since May 25.
There will be no US trading on Monday, June 20, for the Juneteenth holiday.
Brent was headed for its first weekly dip in five weeks, and WTI for its first weekly decline in eight weeks.
“With the central banks making pretty substantial moves to limit growth via interest rate hikes, monetary tightening is showing up here in the petroleum complex,” said John Kilduff, partner at Again Capital LLC in New York, noting slower economic growth should cut energy demand.
US gasoline futures slid about 6% with analysts worried high pump prices will reduce demand.
Automobile group AAA said the price of diesel at the pump hit a record high $5.798 per gallon on Friday.
Published in The Express Tribune, June 18th, 2022.
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