Barrel falls to eight-month low due to dollar strength and recession fears

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Oil prices fell nearly 5% to an eight-month low on Friday as the dollar rose to a two-decade high and fears that rising interest rates push the world’s major economies into recession.

* Brent futures were down $4.35, or 4.8%, at $86.11 a barrel by 1409 GMT, while U.S. West Texas Intermediate (WTI) crude fell $4.58, or 5. .5%, to $78.91.

* Both contracts were in technically oversold territory with WTI on track for its lowest close since Jan 10, Brent since Jan 13.

* For the week, WTI is down 7% and Brent 6%, the fourth straight week of declines for the benchmark indices and the first time since December.

* After the US Federal Reserve raised interest rates by 75 basis points on Wednesday, central banks around the world followed suit, raising the risk of an economic slowdown.

* “The crude oil market is under strong selling pressure as the US dollar remains on a strong upward trajectory amid further reduction in risk appetite,” analysts at energy consultancy Ritterbusch and Associates said.

* The US dollar was on track for its highest close against a basket of other currencies since May 2002. A strong dollar reduces demand for oil because it makes fuel more expensive for buyers using other currencies.

* On the supply side, efforts to revive the 2015 Iran nuclear deal have stalled as Tehran insists on shutting down UN nuclear watchdog investigations, a senior State Department official said. from the United States, which alleviates expectations of a resurgence of Iranian crude exports.

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