UPDATE 8-Oil plunges to eight-month low on strong dollar, recession fears

Reuters

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        * 
      Brent and WTI fall for fourth week in a row
    

        * 
      Recession fears weigh as major central banks hike rates
    

        * 
      U.S. dollar at over 20-year high against basket of
currencies   
    

  
 (Adds latest prices, quote)
    By Scott DiSavino
       NEW YORK, Sept 23 (Reuters) - Oil prices plunged about
5% to an eight-month low on Friday as the U.S. dollar hit its
strongest level in more than two decades and on fears rising
interest rates will tip major economies into recession, cutting
demand for oil.
        Brent  LCOc1  futures fell $4.31, or 4.8%, to settle at
$86.15 a barrel, down about 6% for the week. U.S. West Texas
Intermediate (WTI) crude  CLc1  fell $4.75, or 5.7%, to settle
at $78.74, down about 7% for the week.
    It was the fourth straight week of declines for both
benchmarks, the first time this has happened since December.   
Both were in technically oversold territory, with WTI on track
for its lowest settlement since Jan. 10 and Brent for its lowest
since Jan. 14.
    U.S. gasoline  RBc1  and diesel  HOc1  futures were also
down more than 5%.
    The U.S. Federal Reserve raised interest rates by a hefty 75
basis points on Wednesday. Central banks around the world
followed suit with their own hikes, raising the risk of economic
slowdowns.  urn:newsml:reuters.com:*:nL1N30R1F1
    "Oil tanks as global growth concerns hit panic mode given a
chorus of central bank commitments to fight inflation.  It seems
central banks are poised to remain aggressive with rate hikes
and that will weaken both economic activity and the short-term
crude demand outlook," aid Edward Moya, senior market analyst at
data and analytics firm OANDA.
    The U.S. dollar  .DXY  was on track for its highest close
against a basket of other currencies since May 2002. A strong
dollar reduces demand for oil by making the fuel more expensive
for buyers using other currencies.
    "We had the dollar exploding higher and pushing down
dollar-denominated commodities like oil and growing fears over
the looming global recession that is coming as the central banks
raise interest rates," said John Kilduff, partner at Again
Capital LLC in New York.
        The euro zone's downturn in business activity deepened
in September, a survey showed, suggesting a recession looms as
consumers rein in spending and as governments urge energy
conservation following Russia's moves to cut off European
supply.  urn:newsml:reuters.com:*:nL1N30U0E5
    Wall Street's main indexes slid more than 2% on Friday as
investors feared the U.S. Federal Reserve's hawkish policy
actions to quell inflation could trigger a recession and dent
corporate earnings. The dollar  .DXY  index reached its highest
in over two decades, pressuring oil prices.  urn:newsml:reuters.com:*:nL8N30T5LM
 urn:newsml:reuters.com:*:nL4N30U27M
    Russia launched referendums aimed at annexing four occupied
regions of Ukraine, raising stakes of the war in what Kyiv
called a sham.  urn:newsml:reuters.com:*:nL1N30T2UN
    On the supply side, efforts to revive the 2015 Iran nuclear
deal have stalled as Tehran insists on closure of the U.N.
nuclear watchdog's investigations, a senior U.S. State
Department official said, easing expectations of a resurgence of
Iranian crude oil exports.  urn:newsml:reuters.com:*:nNS0N2Y305
 (Additional reporting by Emily Chow in Singapore and Julia
Payne in London; Editing by Louise Heavens, Paul Simao, David
Gregorio and Chizu Nomiyama)
 ((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters
Messaging: scott.disavino.thomsonreuters.com@reuters.net))

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