Crude oil closes: recession fears and a stronger dollar weigh on crude oil closed lower for the first time in three days

News on November 4, the market is worried that the Fed's sharp tightening of monetary policy will plunge the economy into recession, while the strength of the dollar has also put pressure on dollar-denominated crude oil prices, and New York crude oil closed down
for the first time in three days.

West Texas Intermediate crude December futures fell $1.
83, or 2%, to close at $88.
17 a barrel on the New York Mercantile Exchange, down 2 percent, and settled Wednesday at $90 a barrel, its highest close-in in the month since Oct.
10
.
Brent crude futures, the global benchmark for January on the ICE European Futures Exchange, fell $1.
49, or nearly 1.
6 percent
, to $94.
67 a barrel.

Gasoline prices on the New York Mercantile Exchange fell 0.
1 percent to $2.
6939 a gallon in December and heating oil prices rose 5.
30 percent to $
3.
8653 a gallon in December.
Natural gas prices fell 4.
7 percent to $5.
975/MMBtu in December, up 9.
7 percent
on Wednesday.

Robbie Fraser, global research and analysis manager at Schneider Electric, said there is growing concern that the Fed is "more likely to raise interest rates than do too little," increasing the risk of
the economy "sliding to" into a recession.
He said in his daily commentary that the outlook for crude oil prices was particularly pessimistic due to a shock to potential demand, which was further reinforced by a stronger dollar, weighing on
dollar-denominated crude prices.

The Fed raised its benchmark interest rate by 75 basis points, or 0.
75 percentage points
, as scheduled on Wednesday.
The Fed's policy statement was interpreted as a signal that rate hikes could fall
at the December meeting.

Fed Chairman Powell said at a subsequent press conference that although there may be a small rate hike at future meetings, it is too early to talk about pausing interest rate hikes, interest rates will peak higher than Fed officials had expected, and interest rates may remain high for a long time, and the path to a "soft landing" for the US economy has narrowed
due to persistently high inflation.

Ipek Ozkadekaya, senior analyst at UBS, said in market comments: "The broader sell-off in risky assets triggered by the Fed has undoubtedly limited the upside appetite for oil
.
" U.
S.
crude prices are unlikely to recover above $90 a barrel, "as recession fears would hold investors back or they would buy crude
at current prices.
" "

The Institute for Supply Management's Barometer of U.
S.
Services Sentiment fell to 54.
4% in October, hitting its lowest level
since the 2020 U.
S.
economic lockdown.

The dollar rose sharply after the Fed's decision, with the ICE dollar index, which measures the greenback's exchange rate
against a basket of six major currencies, rising 1.
4 percent to close at 1.
37 percent.
The index is up nearly 18%
so far this year.
A stronger dollar is seen as a negative impact on dollar-denominated commodities, making them more expensive
for users of other currencies.

However, Tyler Richey, co-editor of Sevens Report Research, noted that oil prices have been trending
higher in recent weeks.

Oil prices were supported
by "rising geopolitical tensions surrounding the war in Ukraine and the Middle East" and the U.
S.
government's quest to replenish the Strategic Petroleum Reserve, with the possibility of the DOE's long-term bid in the $70 per barrel range, he said.

"The uncertain global economic outlook and, more specifically, growing recession fears have kept WTI prices at a low of $90 for now, but with upside risks as the end of the year approaches, due to supply concerns," Richey said
.

At the same time, natural gas futures prices fell as trading in this commodity continued to fluctuate
.
Front-month futures contract prices fell more than 5%
after rising sharply the previous day.

The U.
S.
Energy Information Administration reported Thursday that domestic natural gas supplies increased by 107 billion cubic feet
in the week ending Oct.
28.
By comparison, according to a survey conducted by S&P Global Commodity Insights, the average analyst expectation is an increase of 95 billion cubic feet
.