Crude prices fall 3% with recession fears in the spotlight

By Julia Payne

LONDONSep 23 – Crude oil prices fell on Friday on demand fears linked to rising interest rates and a stronger dollar, although losses were limited by the Russian mobilization campaign and the apparent deadlock in talks on a nuclear deal with Iran.

* At 1100 GMTBrent crude futures were down $2.91, or 3.21%, at $87.56 a barrel, and West Texas Intermediate futures in the United States (WTI) were down $2.94, or 3.46%, at $80.61.

* World stocks hit their lowest level in two years, while the dollar index hit its highest in two decades, pushing down oil.

* “Fears of recession, new rate hikes and the consequent strength of the dollar prevail over geopolitical tensions,” said Tamas Varga, an analyst at MVP Oil Associates.

* “Oil gains will be limited as long as the dollar is strong, although the upcoming referendum in eastern Ukraine could further heighten tension between Russia and the West, especially if Ukrainian allies provide additional help for Ukraine to recover these territories,” he added.

* Russia launched a referendum on Friday to annex four occupied regions of Ukraine, something kyiv called an illegal farce that it said included threats to residents if they didn’t vote.

* After the US Federal Reserve hiked rates by 75 basis points on Wednesday, central banks around the world followed suit with hikes of their own, raising the risk of an economic slowdown.

* On the oil supply side, efforts to revive the 2015 Iran nuclear deal stalled as Tehran insists on shutting down investigations by the Iranian nuclear watchdog. UNsaid a senior US State Department official, easing expectations of a resurgence in its crude exports.

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