Title: Oil slumps on fears over economic slowdown, stronger dollar

Aug 22, 2022 01:30AM ET

By: AnalysisWatch

Oil prices tumbled on Monday, ending a three-day rise, as investors worried that aggressive U.S. interest rate hikes would weaken the global economy and reduce demand for fuel, with a strengthening dollar adding to the pressure.

Brent crude futures for October delivery were down $1.20, or 1.2 percent, at $95.52 per barrel as of 0458 GMT.

Futures contracts for September delivery of West Texas Intermediate crude in the United States fell $1.24, or 1.4 percent, to $89.53 per barrel. The more active October contract was at $89.27, down $1.17, or 1.3%.

Both Brent and WTI crude were up for a third straight day on Friday, but were down about 1.5% for the week due to a stronger dollar and demand concerns.

A stronger dollar makes oil more expensive for buyers in other currencies.

Investors will be closely watching comments from Fed Chairman Jerome Powell, who will speak at the annual World Central Banking Conference in Jackson Hole, Wyoming, on Friday.

The Fed is thought to have more room to raise rates than central banks in other major economies, which are more fragile.

Prices have also fallen on fears of slowing fuel demand in China, the world's biggest oil importer, due to a heatwave-induced power outage in the country's southwest.

In a sign of overall concern about China's economy, Beijing cut the benchmark interest rate on Monday and lowered the benchmark mortgage rate by a wider margin, adding to last week's easing measures to revive an economy crippled by the property crisis and the resurgence of COVID cases.

The leaders of the United States, Britain, France, and Germany discussed efforts to revive the 2015 deal on Iran's nuclear program, the White House said Sunday, though no further details were provided.