Oil prices extend decline on recession fears, China COVID curbs

Shafaq News / Oil prices fell for a third straight session on Wednesday as investors fretted about a hit to fuel demand from growing risks of a global recession and tightening COVID-19 curbs in China.

Brent crude futures fell 51 cents, or 0.5%, to $93.78 a barrel by 0033 GMT. U.S. West Texas Intermediate crude was at $88.66 a barrel, down 69 cents, or 0.8%.

Both benchmarks fell 2% in the previous session.

The International Monetary Fund on Tuesday cut its global growth forecast for 2023 and warned of increasing risk of a global recession.

But the IMF also urged central banks to keep up their fight against inflation even as investors worry policymakers could trigger a sharp economic downturn by raising borrowing costs too fast and too high.

Separately, Fed Bank of Cleveland President Loretta Mester said the U.S. Federal Reserve will need to press forward with tightening monetary policy as it has yet to control inflation.

The dollar gained broadly overnight, after a top Bank of England official told pension fund managers to finish rebalancing their positions by Friday, when the British central bank is due to end its bond-buying program.

A stronger dollar makes dollar-denominated commodities more expensive for holders of other currencies and tends to weigh on oil and other risk assets.

Traders are cautiously waiting on the release of U.S. CPI data on Thursday, said CMC Markets analyst Tina Teng.

The oil market is also being pressured by tightening COVID-19 curbs in China, the world's second-largest oil consumer.

(Reuters)