RIYADH: Oil prices fell for a second straight session and were headed for a weekly decline of more than 3 percent on Friday, as a higher-than-expected interest rate hike in Britain and warnings about looming rate rises in the US ignited concerns over demand, according to Reuters.

Brent futures slipped 51 cents, or 0.4 percent, to $73.76 a barrel, while US West Texas Intermediate crude futures were down 42 cents, or 0.6 percent, at $69.09 at 3:40 a.m. Saudi time. 

“Recession fears mount again following central banks’ rate hikes and a hawkish Fed,” said Tina Teng, an analyst at CMC Markets, adding that a stronger dollar was also weighing on prices.

An increase in the value of the dollar, which has risen 0.3 percent this week, can weigh on oil demand by making the fuel more expensive for holders of other currencies.

Both crude benchmarks had dropped about $3 in the previous session after the Bank of England raised interest rates by half a percentage point, sparking fears of an economic slowdown denting fuel demand.

The market is now waiting for the release of Purchasing Managers Indexes from around the world on Friday for a view on manufacturing activity and demand trends.

In the US, crude stocks posted a surprise drawdown in the last week, helped by strong export demand and low imports, the Energy Information Administration said on Thursday. However, gasoline and distillate inventories rose.

Federal Reserve Chair Jerome Powell said the central bank would move interest rates at a “careful pace” from here as policymakers edge toward ending their historic round of monetary policy tightening.

Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and reduce oil demand. Fears of hikes by major central banks have clouded the fuel demand outlook for the rest of the year.

“Energy traders are worried that the Fed and friends might cripple economic growth in the second half of the year,” said Edward Moya, an analyst at OANDA. 

PARIS: The head of the World Bank said Thursday that the lender planned to introduce a “pause” mechanism for debtor countries in the event of them being hit by a crisis.
Ajay Banga told a summit on financing the fight against climate change that the multilateral lender would adopt a new approach that “significantly expands the World Bank’s toolkit.”
The most important measure would be offering “a pause on debt repayments so countries can focus on what matters when a crisis hits and stop worrying about the bill that is going come,” he added.
The idea has been promoted by the prime minister of Barbados, Mia Mottley, who has become a leading champion for low-income countries as well as fellow low-lying island nations.
She has sought to highlight how heavily indebted developing countries are unable to respond to natural disasters, as well as international crises such as the Covid-19 pandemic or inflation sparked by Russia’s war against Ukraine.
Caribbean islands like hers are increasingly vulnerable to tropical storms which can devastate homes and property, as well as livelihoods linked to the vital tourism industry.
The World Bank, the sister organization of the International Monetary Fund, is a top public lender for countries to finance their infrastructure and other project.
The two-day Summit for a New Global Financing Pact in Paris has seen calls for major reform of the nearly 80-year-old institutions, with French President Emmanuel Macron calling them “not completely suited” to tackle current challenges.
United Nations Secretary General Antonio Guterres said: “It is clear that the international financial architecture has failed in its mission to provide a global safety net for developing countries.”