New York City: Oil prices fell on Friday on fears of a global recession and weak oil demand, especially in China, backed by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+.

At 11:12 a.m. EDT, Brent crude futures were down $2.52, or 2.7 percent, at $92.05 a barrel, while US West Texas Intermediate crude futures were down $2.97, or 3.3 percent, at $86.14.

Also Read: EIA cuts global crude oil price estimates on economic slowdown

Both the Brent and WTI contracts oscillated between positive and negative territory for most of Friday, but were down 6% and 7%, respectively, for the week.

With a global recession at risk, US core inflation posted its biggest annual increase in 40 years, reinforcing the idea that interest rates will remain high for a long time. The next interest rate decision in the United States is scheduled for November 1-2.

Consumer sentiment in the United States continued to improve steadily in October, but inflation expectations for households declined slightly, according to a survey released Friday.

The rise in consumer sentiment is "viewed as negative because it means the Fed needs to break consumer sentiment and slow the economy even further, boosting the dollar and easing pressure on the oil market." Is." According to analyst Phil Flynn of Price Futures Group in Chicago.

Also Read: Fitch: Reduced oil production from OPEC+ will have a minor market impact

The US dollar index rose 0.7 per cent on Friday. A stronger dollar lowers demand for oil by raising fuel costs for buyers using other currencies.

After a week off, China, the world's largest crude oil importer, is fighting the COVID outbreak. The country has a low infection rate by global standards, but it follows a zero-COVID-19 policy, which has a significant impact on economic activity and thus oil demand.

Also Read: OPEC cuts crude oil demand growth estimates

The International Energy Agency cut its oil demand forecast for this and next year on Thursday, warning of a possible global recession. Markets are still digesting OPEC+'s decision last week to cut oil production target by 2 million barrels per day. 

According to the IEA, the group's underproduction is likely to result in a shortfall of 1 million bpd. Meanwhile, Saudi Arabia and the United States have clashed over the decision.