[Asia Economy New York=Special Correspondent Joselgina] International oil prices fell sharply amid growing concerns over an economic recession due to tightening policies in the United States and other major countries.
On the 17th (local time) at the New York Mercantile Exchange (NYMEX), July delivery West Texas Intermediate (WTI) crude oil closed at $109.56 per barrel, down 6.82% ($8.03) from the previous trading day. This is the lowest closing price since May 12.
The daily decline was the largest since March 31. Oil prices fell 9.21% ($11.11) this week, ending a seven-week consecutive rise. This marks the first weekly decline in eight weeks.
At the London ICE Futures Exchange, August Brent crude oil was also trading over 6% lower at the $112 per barrel level.
This sharp drop in international oil prices is interpreted as a consequence of the recent 0.75 percentage point interest rate hike by the U.S. Federal Reserve (Fed) for the first time in 28 years, followed by major central banks such as those in the United Kingdom and Switzerland joining the rate hike trend. The fear that rapid interest rate increases will trigger an economic recession has spread, pushing oil prices down. In particular, the Fed's tightening has caused the dollar's value to surge, which also exerted downward pressure on oil prices.
Fawad Razakzada, an analyst at City Index, said, "Concerns about demand are rising as expectations strengthen that the global economy will slow down in the coming months." Robbie Fraser of Schneider Electric also explained, "Many central banks are aggressively raising benchmark interest rates to curb soaring inflation," adding, "Investors are focusing on concerns about consumption in the oil market."
International gold prices fell due to the strength of the dollar. On the same day at the New York Commodity Exchange, August delivery gold closed at $1,840.60 per ounce, down 0.5% ($9.30). Gold prices, which had surged the previous day due to increased safe-haven demand amid recession fears, reversed to a downward trend on this day.
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