Oil prices fell by roughly 6% on Friday, tumbling to a more than four-week low amid fears that rate hikes implemented by the Federal Reserve could touch off a recession.
Futures for the international benchmark Brent crude fell Friday by as much as $6.69 before settling around $113.68 a barrel. Futures for U.S.-based West Texas Intermediate crude dropped to less than $110 a barrel — a 6.8% decline and the largest single-day decline since March.
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The new numbers are a reversal from previous weeks, which saw steady rises in price for both Brent and WTI.
Friday’s decline came just days after the Federal Reserve moved to implement its largest interest rate hike since 1994. It was an attempt to reduce inflation, but it has also raised fears that the United States could fall into a recession.
“The oil market looks like it won’t be tight for much longer as demand destruction calls grow as aggressive central bank tightening will lead to a short-term economic downturn,” said Edward Moya, a senior market analyst at OANDA.
Inflation climbed last month to a 40-year high of 8.6%, prompting fears of “stagflation” — the 1970s term referring to a period of high prices coupled with economic contraction.
Many CEOs now foresee a recession, according to a Conference Board survey.
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Speaking to the Associated Press in an interview published Friday, President Joe Biden said a recession “isn’t inevitable” and claimed that America was in a “stronger position than any nation in the world to overcome this inflation.”
