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Oil Futures Settle Sharply Lower On Demand Worries

Crude oil prices fell sharply on Friday, pushing the most active crude futures contract to their lowest close in about seven months.

Weak outlook for energy demand due to a possible global recession outweighed concerns about tight supplies.

The dollar's strong uptick weighed as well on oil prices. After announcing its third straight 75-basis point hike in interest rates, the Fed signaled more rate hikes at its upcoming meetings in order to fight inflation.

The Fed's rate hike move, and sharp rate hikes by the Bank of England and the Swiss National Bank, and the likelihood of several other central banks, including the ECB, aggressively increasing rates, have raised concerns the global economy will fall into a recession.

West Texas Intermediate Crude oil futures for November ended lower by $4.75 or about 5.7% at $78.74 a barrel, the lowest settlement since January.

Brent crude futures were down $4.28 or 4.73% at $86.18 a barrel a little while ago.

WTI crude futures shed about 7% in the week, while Brent crude drifted down about 6%, losing for the fourth straight week.

Both the IMF and World Bank flagged recession risks last week as central banks across the world simultaneously hike interest rates to combat persistent inflation.

Disappointing economic data from Europe, where manufacturing PMI of the Eurozone fell in September, and the UK downturn deepened, have raised worries about weaker economic growth and demand going forward.

A report from Baker Hughes said the number of oil rigs in the U.S. increased by three to 602 in the week ending September 23.

The number of US gas rigs fell by two to 160 during the week. The total number of rigs in the U.S. now stand at 764, up 181, compared to the same period a year earlier.

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