"US recession fears put oil price on course for significant weekly drop"

" US recession fears put oil price on course for significant weekly drop \r\n\r\nFears of a slowdown in the U.S. economy have pressured crude oil prices, setting them for what could end up being their worst weekly performance in five weeks.\r\n\r\nThe slide began on Wednesday and accelerated on Thursday, after Federal Reserve chairman Jerome Powell said the U.S. central bank would continue with its rate hikes as a means of controlling inflation, signaling these hikes will be large and possibly more frequent than the ones deployed so far.\r\n\r\n\"If - and I stress that no decision has been made on this - but if the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,\" Powell\u00a0 told \u00a0the House Financial Services Committee.\r\n\r\nThat statement had unpleasant implications for the oil market. First, the suggestion that the Fed plans to hike interest rates means the economy is not doing as well as many hoped and might do even worse if faster rate hikes become necessary.\r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n Govt 'oblivious' to rising fuel prices, say Labour \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\nThen there is the problem with the hikes themselves, which many\u00a0 fear \u00a0would make matters worse instead of better, increasing the risk of an actual recession, since the hikes make borrowing more expensive, prompting people and companies to reduce their spending on everything from mortgages to production expansion and consumer goods.\r\n\r\nA recession would also mean lower demand for oil, so it is no wonder that traders\u00a0 reacted \u00a0with a selloff after Powell\u2019s statement to Congress, with\u00a0 West Texas Intermediate \u00a0diving below $80 per barrel and\u00a0 Brent crude \u00a0sliding to less than $82 per barrel.\r\n\r\nAt the time of writing, Brent was trading at $80.94 per barrel and WTI was trading at $74.92 per barrel.\r\n\r\nThe direction oil prices have taken may yet change later today when the weekly U.S. jobs report comes out, but it looks like whatever bullish news the day might produce would be hard-pressed to reverse the overall weekly decline that the prospect of a U.S. slowdown has spurred."

"US recession fears put oil price on course for significant weekly drop"

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