# Oil settles below $90 as recession fears mount
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-09-08
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Oil Prices Sink Below $90 Amid Global Economic Concerns
Meta Description: Brent crude settles at $88, WTI at $81.94 as concerns over energy prices in Europe, recession risks, and rising interest rates weigh on market.
URL: https://financedigest.com/oil-settles-below-90-as-recession-fears-mounthtml

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By Laura Sanicola

(Reuters) -Oil prices settled sharply lower on Wednesday, slumping below levels seen prior to Russia’s invasion of Ukraine as downbeat Chinese trade data fed investor worries about recession risks.

Brent crude futures settled down $4.83 to $88 a barrel, falling below $90 a barrel for the first since Feb. 8. U.S. West Texas Intermediate crude settled down by $4.94, or 5.7%, to $81.94, its [lowest since](https://www.financedigest.com/uk-unemployment-hits-lowest-since-1974-but-jobs-boom-is-fading.html "UK unemployment hits lowest since 1974 but jobs boom is fading") January.

Right now the market is basing its concerns about what will happen due to sharply higher energy prices in Europe, slowing demand in Europe, and interest [rates rising,”](https://www.financedigest.com/oil-falls-as-earthquake-impact-on-crude-eases-rate-hike-fears-rise.html "Oil falls as earthquake impact on crude eases, rate hike fears rise") said Phil Flynn, an analyst at Price Futures Group.

Several [world central banks are slated to keep](https://www.financedigest.com/soccer-englands-houghton-will-keep-knocking-the-door-for-the-world-cup.html "Soccer-England’s Houghton will keep ‘knocking the door’ for the World Cup") hiking rates to fight inflation, but economists have said the United States appears better placed to weather the storms. That has boosted the [dollar to a 24-year peak](https://www.financedigest.com/dollar-edges-down-from-six-week-peak-swedish-crown-jumps.html "Dollar edges down from six-week peak, Swedish crown jumps") against the yen and a 37-year high versus sterling. The stronger greenback pressures [oil prices](https://www.financedigest.com/oil-prices-steady-as-news-of-saudi-russia-meeting-calms-investors.html "Oil prices steady as news of Saudi, Russia meeting calms investors"), since most worldwide oil sales are transacted in dollars.

The European Central [Bank is expected to raise interest rates](https://www.financedigest.com/bank-of-england-raises-rates-to-3-5-says-inflation-has-peaked.html "Bank of England raises rates to 3.5%, says inflation has peaked") sharply when it meets on Thursday. A U.S. Federal [Reserve meeting](https://www.financedigest.com/oil-drops-on-china-fuel-reserves-release-opec-meeting-in-view.html "Oil drops on China fuel reserves release; OPEC+ meeting in view") follows on Sept. 21.

The [Bank of Canada hiked](https://www.financedigest.com/asian-shares-gain-as-fears-about-rapid-fed-hikes-bank-crisis-fade.html "Asian shares gain as fears about rapid Fed hikes, bank crisis fade") interest rates by three-quarters of a percentage point to a 14-year high on Wednesday, as expected, and said the policy rate would need to go even higher as it battles raging inflation.

China’s weak [economic data and stringent zero-COVID policy added to demand concerns](https://www.financedigest.com/oil-near-flat-as-us-crude-stock-draw-contends-with-economic-concerns.html "Oil near flat as US crude stock draw contends with economic concerns"). Its [crude oil](https://www.financedigest.com/oil-dips-after-fed-comments-us-crude-stock-build.html "Oil dips after Fed comments, US crude stock build") imports in August fell 9.4% from a year earlier, customs data showed.

Prices drew some support from Russian President Vladimir Putin to halt the country’s [oil and gas exports](https://www.financedigest.com/u-s-oil-exports-to-europe-hit-record-in-march-on-steep-discounts.html "U.S. oil exports to Europe hit record in March on steep discounts") if price caps are imposed.

The European Union proposed to cap Russian gas only hours later, raising the risk of rationing in some of the [world’s richest countries](https://www.financedigest.com/richest-countries-in-the-world.html "Richest countries in the world") this winter. Russia’s Gazprom has halted flows from the [Nord Stream](https://www.financedigest.com/denmark-invites-nord-stream-operator-to-help-salvage-unidentified-object.html "Denmark invites Nord Stream operator to help salvage unidentified object") 1 pipeline, cutting off a substantial percentage of supply to Europe.

Credit rating agency Fitch on Tuesday said halting of the [Nord Stream](https://www.financedigest.com/new-intelligence-points-to-pro-ukraine-group-in-nord-stream-attack-nyt.html "New intelligence points to pro-Ukraine group in Nord Stream attack -NYT") 1 pipeline increased the likelihood of recession in the euro zone.

U.S. crude stockpiles are expected to have fallen for a fourth consecutive week, declining by an estimated 733,000 barrels in the [week to Sept](https://www.financedigest.com/british-port-workers-plan-two-week-strike-from-sept-19.html "British port workers plan two-week strike from Sept. 19"). 2, a preliminary [Reuters poll](https://www.financedigest.com/ecb-to-go-big-again-on-oct-27-with-75-bps-rate-hike-reuters-poll.html "ECB to go big again on Oct. 27 with 75 bps rate hike: Reuters poll") showed. The [American Petroleum Institute releases its report](https://www.financedigest.com/north-american-market-for-veterinary-respiratory-ventilators-to-hold-lions-share-owing-to-presence-of-major-key-players-fact-mr-report.html "North American Market for Veterinary Respiratory Ventilators to Hold Lion’s Share Owing to Presence of Major Key Players: Fact.MR Report") on Wednesday, a day later than usual because of a public holiday on Monday.

(Additional [reporting by Rowena EdwardsAdditional reporting by Isabel Kua in SingaporeEditing by Jan Harvey](https://www.financedigest.com/hurricane-harvey-highlights-magnitude-of-insurance-protection-gap-according-to-aon-outlook-report.html "Hurricane Harvey highlights magnitude of insurance protection gap, according to Aon outlook report"), David Goodman and David Gregorio)


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