Oil prices have reportedly taken a headlong around the world.
For the first time since January 2022, the prices of crude oil fell amid demand fears fuelled by rising interest rates and a stronger dollar. The fall occurred on Friday 23rd September 2022.
Brent crude, the global oil benchmark, fell 3.10 percent to $87.81 a barrel at 12.37 GMT+1.
US West Texas Intermediate also fell over 3 percent to $80.64 a barrel.
The development came as the MSCI all-country world index (ACWI), the global equity index, hit a two-year low on Friday while the dollar index reached its highest level in two decades, putting downward pressure on oil.
Also, the pound fell to a 37-year low against the dollar as Kwasi Kwarteng, Britain’s new finance minister, announced historic tax cuts and huge increases in borrowing.
On Wednesday, the US Federal Reserve raised interest rates by 75 basis points, propelling central banks around the world to follow suit with their hikes, raising the risk of economic recession.
A recession would adversely affect oil demand, experts had cautioned.
Meanwhile, Russia launched referendums on Friday aimed at annexing adding by appropriation four occupied regions of Ukraine.
Moscow had commenced massive troop mobilisation for its war in Ukraine.
Commenting on the development, Tamas Varga, oil analyst, PVM Oil Associates, told Reuters: “Recession fears, further rate hikes, and the consequent dollar strength trumps geopolitical tension”.
“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.”
In Nigeria, oil theft has posed a serious threat to optimal production.
In 2022, the country witnessed unprecedented levels of menace even as production fell bell below the one million barrels of oil mark.
Recently, the national assembly called for a decisive move toward curtailing crude oil theft in the country.