WTI crude futures steadied near $85 per barrel on Friday but were still set to decline for the third straight week, as aggressive monetary tightening by major central banks and global recession fears dampened the demand outlook. A strong dollar also added downward pressure on energy prices as it makes commodities more expensive for buyers holding other currencies. Moreover, oil prices plummeted on Thursday after the US Department of Energy backtracked previous reports that the US would restock its emergency reserves should WTI prices drop below $80, removing the potential price floor for oil. On the supply side, China is considering allowing more fuel exports, which could be a sign of weak domestic consumption. Several investment banks have issued a dire outlook, with Standard Chartered Plc saying the global oil market swung into a “large surplus” this quarter, while Morgan Stanley and UBS Group AG slashed near-term forecasts on recession fears, Bloomberg reported.
