Amid fears of more aggressive rate hikes in the United States interest rates and mounting COVID-19 cases in China, the demand for oil has squeezed further. London-traded Brent, the global benchmark for oil, fell more than 3 per cent on Thursday to settle at $89.78 a barrel. This is for the first time since October when Brent broke below $90 per barrel. New York-traded West Texas Intermediate (WTI) crude slid $3.95, 0r 4.6 per cent, to settle at $81.64 per barrel.

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St. Louis Fed President James Bullard has said the central bank needs to keep raising rates given that it is tightening so far "had only limited effects on observed inflation." He also said that data show that the labor market remained tight and this has led to some investors to worry about more aggressive interest rate hikes.

In the context of India, this is a piece of good news as oil import would become cheaper and commodities prices will fall.

"There are two indications from America, the first is that crude oil is around $90 per barrel and prices of commodities are coming down. The second is that India need not worry till there is a surge in bond yield and dollar index," said Zee Business Managing Editor Anil Singhvi.

Meanwhile, crude oil exports by OPEC have fallen significantly so far this month, reported Reuters. Also, amid growing concerns of a recession, OPEC+ - which groups the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies - has decided to cut output by 2 million barrels per day, about 2% of world output, from November.

Earlier, British finance minister Jeremy Hunt said the office judged that the UK is already in a recession.

A downturn or recession is defined as when a country's economy shrinks for two three-month periods, or quarters, in a row. Typically, during a recession, companies make less money, pay falls and unemployment rises. This means the government receives less money in tax to use on public services.

The decision of OPEC+ on production cuts had sent Brent up again almost $100 two weeks ago and WTI reached above $93. However, the surge in COVID-19 cases in China wiped out the rebound and both benchmarks continued to fall over the past fortnight.

OPEC is scheduled in its next Monthly Oil Market Report on December 13 to publish production figures for November.

OPEC+ has been boosting output for most of the year to unwind cuts made in 2020 during the worst of the pandemic and shifted back to lowering production for October.

The view from Petro-Logistics is an early assessment of the extent to which OPEC is delivering on the OPEC+ cuts, which it said were decided in the light of an uncertain global economic outlook. U.S. President Joe Biden criticized the decision.

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With agency inputs