Oman oil falls to $84.46, the lowest since Jan

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Muscat – The price of Oman oil for November delivery fell US$4.82 to US$84.46 on Monday, the lowest since January. It slipped below US$90 on September 8 for the first time since the Ukraine war broke out in February.

The monthly average price of Omani crude oil for September delivery stabilised at US$103.21 a barrel, down US$9.72 compared to the August delivery price.

Oil prices hit nine-month lows on Monday, driven down by an expected decline in fuel demand as several countries opted to increase interest rates to tame rising inflation amid recession concerns, triggering anxiety over weak demand, with further price pressure coming from a surging US dollar.

International benchmark Brent crude traded at US$84.07 per barrel for a 1.12 per cent decrease from the closing price of US$85.03 a barrel in the previous trading session. Brent oil dropped to its lowest level since January 14, when it traded at US$83.99 a barrel.

American benchmark West Texas Intermediate (WTI) hit a new low of US$77.85 per barrel at the same time, losing 1.13 per cent after the previous session closed at US$78.74 a barrel. The previous record low was set on January 6 when WTI traded at US$88.74 a barrel.

Both benchmarks lost almost five per cent on Friday as interest rate hikes by major economies blurred the demand outlook.

Following the US Fed’s 75-point interest rate increase on Thursday, the Bank of England raised its key interest rate by 50 basis points. Rate increases in Norway, Switzerland, Taiwan, South Africa, Indonesia and the Philippines ensued.

The rising value of the US dollar also magnified demand fears, repelling buyers from dollar-indexed oil. The dollar index increased 0.8 per cent to 113.33, its highest level in 20 years, fueling the price downturn.