Brent crude futures, on Friday, fell 2.28 percent to $78.87 per barrel while West Texas Intermediate futures slipped 2.76 percent to $74.01 per barrel.
Gatekeepers News reports that the development comes as the Central Banks in Europe raised interest rates.
Analysts from ANZ Research, while commenting on the downward trend of the commodity, told Reuters that tighter monetary policy is already having an impact on industrial activity.
“The prospect of further tightening following hawkish comments from policy makers weighed on sentiments,” the analysts said.
On Thursday, the US Federal Reserve hiked interest rates to a targeted range between 4.25 percent and 4.5 percent, indicating it will raise interest rates further next year.
The Bank of England and the European Central Bank raised interest rates (the same day) to 3.5 percent and 2.5 percent respectively, to fight inflation.
Meanwhile, the International Energy Agency (IEA) raised its 2023 global oil demand growth estimate to 1.7 million barrels per day (bpd).
Analysts from J.P Morgan Commodity Research also expect the United States to start restocking its strategic petroleum reserves in the first quarter of 2023.
“Based on our quarterly projections, this window (for repurchase) will open in the first quarter of 2023 with initial purchase of around 60 million barrels over first half of 2023,” they said.
