Oil prices fell more than $7 a barrel on Tuesday, the steepest decline in about a month, on fears that an inflation-induced weakening of global economies would soften fuel demand and as unrest in Iraq has failed to put a dent in the OPEC nation’s crude exports.
Brent crude futures for October settlement were down $7.12, or 6.8%, at $97.97 a barrel by 12:20 p.m. EDT (1620 GMT) after touching a session low of $97.91 a barrel.
The October contract expires on Wednesday and the more active November contract was at $97.10, down 5.7%.
U.S. West Texas Intermediate crude dropped by $6.10, or 6.3%, to $90.93.
Inflation is near double-digit territory in many of the world’s biggest economies. This could prompt central banks in the United States and Europe to resort to more aggressive interest rate increases, which could slow economic growth and weigh on fuel demand.
The European Central Bank should include a 75 basis-point interest rate hike among its options for the September policy meeting given exceptionally high inflation, Estonian policymaker Madis Muller said on Tuesday.-Economic Times