By Adedapo Adesanya
Brent crude fell below $80 on Friday after losing $2.17 or 2.4 per cent to trade at $79.04 per barrel as central banks across Europe and North America signalled they will continue to battle inflation aggressively.
Also, the price of the United States West Texas Intermediate crude futures fell by $1.82 or 2.4 per cent yesterday to settle at $74.29 per barrel.
The market went southwards following signals that central banks will continue to fight inflation by hiking rates, although at varying speeds.
On Thursday, the Bank of England and the European Central Bank raised interest rates to fight inflation.
The Bank of England hiked its interest rate by half a point to 3.5 per cent, the ninth in a row and the highest level in 14 years, in a bid to cool sky-high inflation.
Europe’s central bank in Frankfurt raised its benchmark interest rate for the fourth time this year to 2.5 per cent.
This came after the world’s largest oil producer and consumer, through its central bank, the US Federal Reserve, indicated it would raise interest rates further next year, even as the economy slips toward a possible recession.
Regardless, both benchmarks finished the week higher, aided by rallies in the first three days. Brent futures notched their biggest weekly gains since early October, but those gains follow the worst weekly rout since August for the oil benchmark.
This was spurred by the fact that the Canada-to-U.S. Keystone pipeline shutdown continues without a timetable for restart, adding to worries about supply.
Prices briefly erased some losses after officials said the US Energy Department would repurchase 3 million barrels of domestic crude oil for the Strategic Petroleum Reserve (SPR), the first purchase since this year’s record 180 million barrel release from the stockpile.
President Joe Biden announced the 180 million sales in late March to combat surging gasoline prices that boosted inflation after the February invasion of Ukraine by Russia, the world’s largest exporter of fossil fuels.