Rising interest rates and muscular dollar push oil prices down

London — Oil prices fell on Friday as demand fears were stoked by rising interest rates and a stronger dollar, though losses were capped by Moscow’s mobilisation campaign in its war with Ukraine and apparent deadlock in talks on reviving the Iran nuclear deal.

Brent crude futures fell $2.81, or 3.11%, to $87.65 a barrel by 10.51am GMT. US West Texas Intermediate (WTI) crude futures were also down, retreating by $2.93, or 3.51%, to $80.56.

Front-month Brent and WTI contracts were down 4.03% and 5.37% respectively over the past week.

Global equities hit a two-year low on Friday while the dollar index reached its highest level in two decades, putting downward pressure on oil.

“Recession fears, further rate hikes and the consequent dollar strength trumps geopolitical tension,” said Tamas Varga, oil analyst at PVM Oil Associates.

“The upside in oil will be limited while the dollar is strong, albeit the weekend’s staged referendum in the eastern part of Ukraine could further increase tension between Russia and the West, especially if Ukrainian allies provide additional help for Ukraine to reclaim these territories.”