Oil benchmarks are slipping into the weekend as the US dollar continues pushing higher following the Fed’s recent overt signal to keep pressing on with its aggressive fight against inflation.
Brent oil is pulling further below the psychologically-important $90/bbl mark, and remains on course for a fifth weekly decline over the past six weeks.
Global recession risks may well ramp up further in light of the incoming salvos of rate hikes globally, potentially heaping more downward pressure on oil benchmarks.
If demand-side fears are amplified, Brent could revisit the mid-$80/bbl support region in the near-term.
However, a significant drop in oil prices from current levels may prompt OPEC+ to trigger more supply cuts in order to shore up prices.
Adding to oil’s uncertain outlook is the prospects of a price cap on Russian oil. Still, a further ramp up of Western sanctions on Russia is set to be a laborious undertaking, considering the pushback already evident from some EU members who have a lower tolerance for economic pain.