Oil prices drop amid recession worries, U.S. dollar strength

By Trend

Oil prices fell on Thursday as traders grew concerned that major central banks' policy tightening would trigger a global recession and cripple demand for energy, Trend reports citing Xinhua.

The West Texas Intermediate (WTI) for January delivery lost 1.17 dollars, or 1.5 percent, to settle at 76.11 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for February delivery dropped 1.49 dollars, or 1.8 percent, to close at 81.21 dollars a barrel on the London ICE Futures Exchange.

The Federal Reserve on Wednesday raised interest rates for the seventh time this year and signaled more rate hikes to come next year.

The European Central Bank and the Bank of England on Thursday both raised key rates by 50 basis points, joining the Fed with a December hike in their respective efforts to rein in the fastest inflation in decades.

Also weighing on oil prices was a stronger U.S. dollar. The dollar index, which measures the greenback against six major peers, surged 0.76 percent to 104.5570 in late trading on Thursday. Historically, the price of oil is inversely related to the price of the U.S. currency.