- Oil prices fell Friday below $80 a barrel for the first time since January on ongoing worries about global energy demand.
- Central banks around the world, including the Federal Reserve, the Bank of England, and the Swiss National Bank, have continued to raise the interest rates in an effort to combat rising prices as inflation has reached historically high levels. The actions might continue to lower the demand for energy.
- The American dollar reached its highest level in more than 20 years on Friday, playing its part to push energy prices downwards.
- Oil demand has been affected by both rising interest rates and recession fears. Oil is one of the commodities that is most susceptible to rate increases.
The U.S. benchmark oil price, West Texas Intermediate, ended the day at $78.74 per barrel, down 5%, and Brent, the worldwide benchmark, ended the day down 4% at about $86.15.
On Friday, the average cost of a gallon of normal gasoline was $3.69, 20 cents less than one month prior. If not for a fire that occurred this week at the BP refinery in Oregon, Ohio, which caused fuel prices in the Midwest to rise, the cost would be lower.
Oil is in short supply globally, but demand for the fuel has also been low. Because the government of China routinely locks down major cities and areas, the nation’s energy consumption, which over the past two decades has been a major factor in determining oil prices, has decreased significantly.
After climbing steadily for the majority of the past 12 months, oil prices sharply increased in February after Russia invaded Ukraine. The S&P 500’s energy sector saw the worst weekly fall, yet it is still one of just two that is showing gains in 2022.